Boeing is about to collapse! The company, which is neck deep in debt, is asking for a loan of billions of dollars

The company's commercial airplane production has been halted due to a month-long strike by 33,000 members of the International Association of Machinists (IAM). Talks between Boeing and IAM broke down last week without any new negotiation plan.

Boeing Crisis: Aircraft manufacturing company Boeing is facing a cash crisis. The company is facing huge losses due to strikes, years of operational and security related problems. After this, the company is now turning to major banks and Wall Street to raise billions of dollars in cash. The exchange filing has mentioned the company's plan to borrow $10 billion from a group of banks. The company also informed about its plan to raise $25 billion by selling stock and debt. Out of the $25 billion being raised by Boeing, there is a plan to take a loan of $10 billion.

Operation loss of more than $33 billion

The company's debt has risen sharply over the past six years, during which Boeing has recorded operating losses of more than $33 billion. A month-long strike by 33,000 members of the International Association of Machinists (IAM) has halted the company's commercial airplane production. Talks between Boeing and the IAM broke down last week without any new negotiation plans. Later, Boeing's new CEO Kelly Ortberg announced plans to cut 10% of its 171,000 employees. Boeing's credit rating has fallen to the lowest investment grade level.

Boeing's long-term debt rises to $53 billion

Major credit rating agencies have warned that Boeing is at risk of being downgraded to junk. This will increase its borrowing costs. Boeing's long-term debt has risen from $10.7 billion at the end of March 2019 to $53 billion by the end of June. The 737 Max, the company's best-selling aircraft, was grounded for 20 months after it crashed.

Boeing had to face one problem after another.

During the last six years, Boeing has had to face one problem after another. 346 people died in two accidents of 737 Max. For this, the company will be fined heavily and will be required to operate under the supervision of a court-appointed monitor. The lawyers of the families of the victims of this accident argued in court that the related punishment is not enough. It also came to light that the company had compromised on safety and quality.

The IAM strike is the latest development. Last month, the company and union leadership agreed to a tentative deal that would have given union members a 25% pay rise over the four-year life of the contract, only for the rank-and-file to vote almost unanimously to reject the deal and go on strike. Boeing's proposal to increase the pay rise to 30% over the life of the deal was also rejected by union negotiators.