Washington state Democrats press reluctant Boeing to take federal loans
In trouble even before the pandemic, Boeing executives worry about the loan terms. Lawmakers express worry about workers.
It’s been nearly two weeks since President Donald Trump signed into law a $2 trillion economic rescue package that included $17 billion in loans designed for Boeing, but it’s not yet clear the company will ask for the money.
In two separate television appearances last month, Boeing CEO Dave Calhoun expressed concern about provisions in the law that would allow the government to receive equity stakes in companies that accepted aid.
Calhoun’s ambivalence about giving the federal government a stake in the company spurred seven Democrats in Washington state’s congressional delegation this week to urge him to take the money.
“We are disappointed to read reports that you are now considering forgoing the relief Boeing requested,” read the letter, led by Rep. Rick Larsen, D-Wash., chairman of the House Transportation Committee’s Aviation Subcommittee.
The letter expressed concern that the company was suspending operations and requiring employees unable to telework to use vacation or sick leave or seek unemployment.”
But Calhoun has made it clear he’s uneasy about the company handing over equity to the federal government.
“If they force it, we just look at all the other options, and we’ve got plenty of them,” he told Fox Business’ Maria Bartiromo last month. He said it’s “not ideal” to not have the aid, “but if they attach too many things to it, of course you take a different course.”
He expressed that concern even after the company had requested $60 billion in liquidity from the federal government as part of the relief package, saying he preferred an option that would simply allow the company to pay back the loan with interest.
A person familiar with the company’s decision-making said it is still waiting for guidance from the Treasury Department about conditions and requirements for the relief and will assess what to do based on that guidance.
The law did not cite Boeing by name, but a provision allocating $17 billion in loans for “businesses critical to maintaining national security” was widely believed to apply to the troubled company, which has struggled in the aftermath of two Boeing 737 Max accidents in Ethiopia and Indonesia that killed 346 people.
The Max has been grounded since March 2019 and has faced repeated obstacles keeping it from returning to flight.
In early March, the FAA recommended Boeing be fined nearly $20 million for installing equipment in the 737 Max and other aircraft without approval. And the company’s KC-46 refueling tanker has been riddled with cost overruns and missed deadlines.
The combined problems spurred Dan Grazier of the government watchdog Project on Government Oversight to criticize the $17 billion loan provision last month, saying he worried the Boeing loans would “be used to cover for a lot of bad decisions made in the past.”
But the Washington Democrats said in their letter they are concerned about the impact on the workforce. Boeing employs about 70,000 people in Washington and has indefinitely shut down its production in the Seattle area. On Monday the company announced it was suspending production of its 787 airliner in South Carolina.
“Given the severe harm the nation’s aerospace industry and hardworking women and men at the Boeing company are experiencing during this pandemic, we hope you will consider utilizing the economic assistance provided by the CARES Act to safeguard thousands of jobs at Boeing in Washington state and across the country,” the letter read.