COVID-19

Boeing is in line for a bailout under “too big to fail” theory

Jon Gordon and Jack Stewart Mar 20, 2020
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Boeing directly employs about 150,000 people but relies on the broader aerospace industry with 2.5 million jobs. David Ryder/Getty Images
COVID-19

Boeing is in line for a bailout under “too big to fail” theory

Jon Gordon and Jack Stewart Mar 20, 2020
Boeing directly employs about 150,000 people but relies on the broader aerospace industry with 2.5 million jobs. David Ryder/Getty Images
HTML EMBED:
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Boeing is critically important to the U.S. economy. That is the argument being made in favor of giving the company a government bailout. If Boeing collapses, the effects would ripple through American manufacturing. In essence, the company is too big to fail. Right?

“Yes, that is absolutely correct, it is too big to fail,” said Bijan Vasigh at Embry-Riddle Aeronautical University. He said Boeing’s importance to the U.S. economy can’t be overstated. 

“Air transportation, including aircraft manufacturing, if it was a country, would be the fifth biggest economy in the world.”

Boeing is a huge part of that, along with its suppliers.

“The bulk of the jobs involved are actually in the supply chain,” said Richard Aboulafia, an aviation analyst at Teal Group. 

“It’s tremendously complicated to build a jetliner, and there are lots of individual subcontractors, each with their own workforces,” he said. Take the 737 Max, for example. The body comes from Spirit AeroSystems in Wichita, Kansas. General Electric builds the engines in Evendale, Ohio, along with a French company

And Boeing is also a space and defense company, building everything from fighter jets to a new spacecraft designed to take astronauts to the International Space Station. 

“They are a huge provider of government services,” said Arthur Wheaton at the Worker Institute at Cornell.

Boeing employs around 150,000 people directly. In its call for government support, it says it relies on the broader aerospace industry with 2.5 million jobs.

Wheaton said it’s important to protect that specialized, highly trained workforce.

“If you start shutting Boeing down, and you start losing those employees, then you could be hurting by decades the capacity of the United States to start building other planes when things, or if things, pick up,” he said.

COVID-19 Economy FAQs

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

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