Boeing, the American multinational corporation, is on the brink of a bailout due to the dual crisis of the 737 Max and the Covid-19 pandemic, which have hit the company’s finances hard. The corporation’s crisis is not just a result of these unforeseen events, but rather a consequence of decades of mismanagement, financial engineering, and a disregard for engineering safety.
Boeing’s financial problems began with a series of mergers in the 1990s, which saw the company prioritise short-term gains over long-term stability. This was followed by a shift in corporate strategy towards financial engineering, involving stock buybacks and massive dividends, rather than investing in new planes and technology. This approach was taken to the extreme under CEO Jim McNerney, who prioritised cost-cutting and financial engineering over safety, leading to the 737 Max crisis.
The Covid-19 pandemic has further exacerbated Boeing’s problems, with a sharp decline in air travel leading to a drop in demand for new planes. Despite this, the corporation is expected to receive a bailout from the US government, which will effectively reward the company for its poor management decisions.
This situation raises questions about the role of corporations in society and the consequences of financial engineering. It also highlights the need for regulatory reform to prevent similar crises in the future.
Go to source article: https://mattstoller.substack.com/p/the-coming-boeing-bailout