Boeing seeks to line up billions in financing as strike goes on

Boeing on Tuesday announced steps to improve its financial position as costs mounted and a strike by its largest union entered its second month. In two regulatory filings, the company said that it could raise as much as $25b by selling debt or stock over the next three years and that it had entered into a $10b credit agreement with a group of banks, which it has not yet drawn on. “These are two prudent steps to support the company’s access to liquidity,” Boeing said in a statement. The banks are BofA Securities, Citibank, Goldman Sachs Lending Partners and JPMorgan Chase. The moves come days after the company revealed about $5b in new costs and announced a restructuring that included plans to cut 17,000 jobs, or 10% of its work force. The strike, which began a month ago, is costing Boeing tens of millions of dollars a day, according to various estimates. Most of the workers who walked out are involved in production of commercial airplanes, bringing much of that work to a virtual halt, though one major airplane, the 787 Dreamliner, is manufactured at a nonunion factory in South Carolina. Talks between the company and the union representing 33,000 striking employees, the International Association of Machinists and Aerospace Workers, broke down last week, with Boeing retracting its latest contract offer and each side blaming the other for intransigence. Julie Su, the acting labor secretary, visited Seattle on Monday to meet with Boeing and the union, the union said in a statement. The strike is very likely costing Boeing about $1.3b in capital a month, according to calculations by Sheila Kahyaoglu, an analyst at Jefferies, the investment bank. Given those costs and its need for more debt, raising $10b by selling new shares would provide the company “considerable flexibility,” Kahyaoglu said in a research note.<br/>