Will COVID-19 Kill Boeing?

Richard Mellor

Afscme Local 444, retired

Things are looking very bleak for Boeing Corporation. It was in trouble before the pandemic hit with the 737 MAX jet being grounded due to safety failures and two safety related crashes that killed 346 passengers and crew. Deliveries of the MAX have resumed but now FAA specialists—rather than Boeing officials—will have to OK each MAX sale before they can be delivered. The free market gurus must be choking on their own vomit. There are further problems related to delivery quality and safety issue with regard to Boeing’s transatlantic plane, the Dreamliner as well.

 

One can imagine the media frenzy if these problems were all about a Chinese manufactured plane.

 

The Pandemic has brought further pain with the collapse of air travel. Boeing’s biggest competitor, Europe’s Airbus was the world’s number 1 manufacturer of planes in 2020. The gap between the two giants has become a chasm.

 

Boeing delivered just 84 passenger jets to customers in 2020 a 90% decline from 2018 according to media reports. This is forcing Boeing to go deeper it to debt and cut costs which will surely mean layoffs of workers at the Seattle and S. Carolina factories but also pilots, flight attendants, ground workers and other sectors related to air travel. Leasing companies are also cancelling orders as the pandemic has left the airline industry with massive overcapacity.

 

Aside from more debt, what’s keeping Boeing afloat is relying on cargo and military jet sales, perhaps a war might help and Biden will cooperate in this regard if need be, he has to prove to the world he is not what Trump has called him. Last year Boeing’s total deliveries including cargo and military jets was 157 whereas Airbus delivered 566 to its global clients. As if the present situation isn’t enough, there is a likelihood that some customers will be demanding compensation for all the holdups and orders cancelled, including 600 MAX orders last year. The Wall Street Journal reported that all production of the MAX is being shifted to the South Carolina plant in March. This is something Boeing management held over workers’ heads in Seattle in order to force a concessionary contract on them. The Pandemic economy has achieved that.

 

Boeing is very important to the US economy. It has held the world’s number one position in plane manufacturing and is the world's largest aerospace company. As of December 2019 it was the USA’s largest exporter involved in commercial airplane manufacturing, defense and aerospace industries and with its subsidiaries employed 143,000 workers in 50 states.

 

The rosy, future the new administration paints as long as we all get along and work together, has the potential to turn in to nightmare. It seems highly probable that Boeing will have to be bailed out by the US taxpayer and most likely nationalized. The US propaganda machine detests the “N” word and will call for conservatorship, a much nicer and less frightening term for the investors. This was used during the last bailout in the Great Recession.

 

The aircraft industry, or more accurately, the means of transportation in society, should be publicly owned and managed by workers as producers and consumers. This cannot be successful if isolated from the other corporate entities that dominate our lives and has to be extended to include the finance industry and allocation of capital, as well as other major industries, energy, communication etc.  that are essential to society and human life, which means in our pursuit of happiness, not profits. This will mean a major national and international struggle against capital and its adherents.

 

Baton down the hatches folks and as the old Wobbly saying goes, “Don’t Mourn, Organize”.