Boeing hires Lazard, Evercore to assess government aid or private loans: source

By David Shepardson
·2 min read
Outbreak of the coronavirus disease (COVID-19) in Everett
Outbreak of the coronavirus disease (COVID-19) in Everett

By David Shepardson

WASHINGTON (Reuters) - Boeing Co has hired investment banks Lazard and Evercore Inc to assess potential U.S. government assistance or private sector loans, a person briefed on the matter confirmed on Friday.

The largest U.S. planemaker asked last month for at least $60 billion in U.S. government loan guarantees for itself and other American aerospace manufacturers to help the embattled industry withstand a coronavirus-related cash drain.

"We're going to be meeting with Boeing," President Donald Trump told reporters on Friday. "Boeing has not asked for aid yet but I think they probably will... We can't let anything happen to Boeing."

Boeing did not immediately comment.

Boeing has noted that typically 70% of its revenue flows to its 17,000 suppliers and has told lawmakers that without significant assistance the entire U.S. aviation manufacturing sector could collapse.

"This isn't a great time to sell airplanes," Trump said, adding that the United States will make sure "Boeing is strong again."

The Wall Street Journal reported earlier that Boeing had hired the two investment banks.

The U.S. Congress set aside $17 billion in direct loans for national security related companies that could be tapped by Boeing. Boeing could also take part in a Treasury-backed Federal Reserve lending program and one analyst said it could raise up to $11.25 billion under one facility.

This week, Boeing suspended production of its 787 airplane at its facilities in South Carolina and had indefinitely extended a halt in its production operations at its Washington state facilities.

But the company late on Friday said it was intending to restart limited operations in the Puget Sound region in Washington state from April 13 onwards. The resumption of operations would focus on its defense programs, including P-8 and KC-46, and Moses Lake site operations in support of 737 MAX storage.

Last week, Reuters reported Boeing was looking at drastic cuts in wide-body production amid a slump in demand for the industry's largest jetliners, citing sources.

Boeing's airline customers have deferred taking new aircraft and making pre-delivery downpayments, compounding a crisis over the year-old grounding of Boeing's previously fast-selling 737 MAX jet after two fatal crashes. Boeing halted 737 production in January and this week said it was now dealing with two new software issues it must address before the plane can resume flights.

Last month, Boeing Chief Executive Dave Calhoun said he does not want the U.S. Treasury to take an equity stake as a condition of government loans.

(Reporting by David Shepardson; additional reporting by Bhargav Acharya; Editing by Rosalba O'Brien and Sandra Maler)