Boeing CEO says company may reject stimulus if Treasury seeks equity stake
Boeing chief executive David Calhoun on Tuesday suggested that the aircraft manufacturer would not accept federal aid as part of a pending economic rescue bill if it meant giving the Treasury Department a stake in the company.
Calhoun said in an interview with Fox Business Network that it’s “not ideal” for Boeing to surrender equity to the federal government and “if they force it, we just look at all the other options, and we’ve got plenty of them.”
Boeing is requesting $60 billion in federal loans from a $500 billion corporate assistance program created in the Senate’s $2 trillion economic stimulus bill. The bill, which is still being negotiated, also allows the Treasury secretary to take a stake in bailed-out corporations, as the government did to major banks who received federal rescue funds in 2008.
The aerospace giant is facing financial peril because of a severe decline in earnings from the near-total cancellation of international air travel and the lingering costs of grounding the 737 Max commercial airplane.
“It’s not ideal if we don’t have it, but if they attach too many things to it, of course you take a different course,” Calhoun said, referring to the stimulus loans.
“I want them to support the credit markets, provide liquidity, allow us to borrow against our future, which we all believe in very strongly and I think our creditors will, too. It’s really that simple,” he added.
Calhoun’s comments come one day after Treasury Secretary Steven Mnuchin said he would consider taking equity stakes in companies who receive loans through the stimulus bill.
“We will be doing things on market terms. And if we determine that market terms include equity, we have the ability to do that. So the president has made very clear, if the taxpayers are putting money at risk, they should be properly compensated,” Mnuchin said on Fox Business Network on Monday.
Mnuchin and Senate Minority Leader Charles Schumer (D-N.Y.) spent Tuesday negotiating a deal to clear the $2 trillion stimulus bill after days of heated talks and flaring tempers between Republicans and Democrats. Both sides said late Monday that a deal was imminent.
The stimulus plan would also need to pass the House, where the Democratic majority has already released it own $2.5 trillion economic rescue bill.
The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.