Boeing at risk of junk rating with S&P amid strike

S&P Global Ratings is looking at downgrading Boeing’s credit grades to junk, citing the planemaker’s growing cash needs as it suffers from a protracted strike by machinists. The credit grader estimated that Boeing will burn through about $10b of cash in 2024. The company is likely to need additional funding to meet its day-to-day cash needs and finance debt maturities, according to a statement Tuesday. “The strike puts Boeing’s recovery at risk,” according to S&P. “We believe the company remains exposed to higher-than-expected cash usage and adjusted debt for the next year or two.” Junk-rated companies usually face higher borrowing costs than their investment-grade counterparts. Boeing has $4b of debt coming due in 2025 and also $8b coming due in 2026, according to Moody’s Ratings, which said last month that it’s considering downgrading Boeing to junk. Boeing has been plagued by manufacturing problems for years, and has lost money on an annual basis since 2019. This year it has faced additional pressure, most recently from a strike by 33,000 hourly factory workers that’s shut down its manufacturing across the Pacific Northwest. That walkout is costing Boeing more than $1b a month, even with a slew of cost-saving measures that it’s put in place, S&P said in the report. The ratings firm doesn’t expect Boeing to reach its target of producing 38 of its 737 Max jets per month until mid-2025, months after the year-end goal set by company executives. <br/>