Boeing Co chief executive officer David Calhoun on Monday said that it would take years for the aircraft-building business to return to levels seen before the COVID-19 pandemic, which has slowed air travel to a trickle and led airlines to park 2,800 jets.
“We are in an unpredictable and fast-changing environment, and it is difficult to estimate when the situation will stabilize, but when it does, the commercial market will be smaller and our customers’ needs will be different,” Calhoun told shareholders.
ADDED TROUBLE
Photo: AFP
Boeing was in crisis before the pandemic. The grounding of its best-selling jet, the 737 MAX, after two crashes that killed 346 people sent the company spinning last year to its first money-losing year in two decades and battered its reputation.
The virus outbreak has added to Boeing’s troubles by causing airlines to delay or cancel plans to buy new jets. The virus also caused Boeing to shut down assembly plants for several weeks, although it recently reopened in the Seattle area and announced on Monday that it would resume production at a South Carolina plant in less than a week.
GOVERNMENT LOANS
The company is expected to apply for a share of US$17 billion in low-interest loans that the US Congress and US President Donald Trump’s administration set aside for defense firms.
“We know we are going to have to borrow more money in the next six months in order to get through this really difficult moment” and help suppliers, Calhoun said, without detailing where or how much Boeing would borrow.
The Chicago-based company is to report its first-quarter results today, and analysts surveyed by FactSet Research Systems Inc expect a loss of more than US$500 million, or US$1.57 per share.
GUIDANCE IGNORED
The shareholder meeting was held online due to the pandemic.
Shareholders approved a slate of 12 company-backed nominees for the board, despite recommendations from two proxy advisers against five directors, including the chairman, for what the advisers called poor oversight of the company’s handling of the 737 MAX crisis.
Glass Lewis told shareholders to reject non-executive chairman of the board Lawrence Kellner, and Institutional Shareholder Services Inc targeted four other longtime directors and told investors to support Calhoun “with caution.”
All of them served on the board during development of the 737 MAX.
Kellner received 74 percent of shares voted, not counting abstentions, Boeing said.
The four highlighted by Institutional Shareholder Services — Susan Schwab, Arthur Collins Jr, Edmund Giambastiani Jr and Ronald Williams — received 57 percent to 67 percent, while all others were 95 percent and above.
Shareholders narrowly approved a measure calling for an independent chairman.
Kellner is an outsider, but Dennis Muilenburg held the chief executive officer and chairman titles until he was fired in December last year.
Boeing shares have dropped 60 percent this year.
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