CNBC’s Jim Cramer said Wednesday that Boeing “will run out of money” if it is not “saved” during the coronavirus-driven market drop.
Per SeattleTimes, Boeing said Tuesday it’s asking for “a minimum of $60 billion … for the aerospace manufacturing industry” in a combination of direct taxpayer money and loans from banks backed by government guarantees.
The nation’s America’s aerospace industry supports over 2.5 million jobs and 17,000 suppliers, Boeing said in a statement, and government financial support is “needed to manage the pressure on the aviation sector and the economy as a whole.”
U.S. airlines are also seeking over $50 billion in financial assistance, including grants, tax relief and government-backed loans.
That’s hard to swallow for critics of big business, who point to the billions of dollars in profits both U.S. airlines and Boeing have made over the past decade — profits that management used in good measure to pay tens of millions of dollars to top executives, to juice the stock price with massive share buybacks and to deliver handsome dividends to shareholders.
Yahoo reports a Republican proposal introduced in the U.S. Senate on Thursday would grant up to $58 billion in secured loans to help passenger and cargo airlines hit by the coronavirus crisis, but bar cash grants and could result in the government getting equity stakes.
Under the proposal, the U.S. Treasury Department could receive warrants, stock options, or stock as a condition of government assistance in order for the government to participate in gains and be compensated for risks.
The measure would also bar airlines from increasing compensation for, or provide golden parachutes to, executives for two years and airlines would be required to maintain some services. It would suspend some aviation taxes.
“We are not bailing out the airlines or other industries – period,” said Senator Richard Shelby, who chairs the appropriations committee.
The proposal comes after major airlines doubled down on Thursday on a request for government cash grants.
“The current economic environment is simply not sustainable,” Airlines for America and a coalition of major aviation unions wrote in a joint letter.
The group, representing American Airlines Group <AAL.O>, Delta Air Lines Inc <DAL.N>, United Airlines <UAL.O> and other airlines, and unions urged lawmakers to provide a package of unsecured loans, grants and tax relief.
“The survival of our industry depends on it,” they wrote.
The airline group had asked on Monday for $25 billion in cash grants and $25 billion in unsecured loans for passenger airlines and another $8 billion for cargo carriers.