Cash-strapped Boeing is looking to raise $19 billion in a stock offering to relieve it's liquidity issues and blunt the effects of a prolonged strike by production workers. The company is offering 90 million common shares and $5 billion in depositary shares to make ends meet. It says it intends to use the money for "general corporate purposes" which means keeping the lights on for those who are still working.
Would not be surprised if Boeing declares chapter 11 bankruptcy first rather than reinstating the pension, just like GM did in 2008. The only way the pension returns is if the union runs it just like the UAW does.
A DB is bad for workers, bad for the company. One the company becomes a slave to the arcane ERISA rules which distorts its balance sheet. Two workers becomes slaves to the company because every time the company gets in financial trouble and wants concessions, they wave the âbankruptcyâ banner and say, "Your pension plan is at risk (because DBâs can be handed over to the PBGC in bankruptcy) If you notice the American Airline pilots controlled their own destiny in bankruptcy because they had a defined contribution pension (money in you own account) rather than other airlines where the employees were along for the ride with DBs. When the company waves the bankruptcy flag, employees with DC plans say, âknock yourself out.â The IAM would do well to establish a DC with a 15% of gross contribution on a monthly basis to each workers account. DB pensions are pernicious to all involved. .
Itâs time the âInternational Association of Machinists and Aerospace Workersâ step up and create a retirement program that takes care of their members and give them a reason to be a member.
Security and quality of life are the issues here. We can hypothesize about financial outcomes and company fortunes ad infinitum. This is now and here. Boeing needs to find the cash and act now before the situation deteriorates to the point of mutual demise. They will find the money one way or another.
While it might seem the union is putting the company in peril, I bet they are counting on the US government to bail out Boeing much like the âtoo big to failâ banks back in 2008. I donât think the union feels Boeing is truly at risk to fail.
Boeing is now selling stock (which is now at a low for the last several years) that it bought back through the years at a higher price! So theyâre loosing money, again! They were told by Boeing employees, retirees and experts that wasnât a good idea, but did they listen? NOOOOOO!!!