COVID-19

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

Jon Gordon and Jack Stewart Mar 20, 2020
Share Now on:
HTML EMBED:
COPY
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
Share Now on:
HTML EMBED:
COPY

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

Which businesses are allowed to reopen right now? And which businesses are actually doing so?

As a patchwork of states start to reopen, businesses that fall into a gray area are wondering when they can reopen. In many places, salons are still shuttered. Bars are mostly closed, too, although restaurants may be allowed to ramp up, depending on the state. “It’s kind of all over the place,” said Elizabeth Milito of the National Federation of Independent Business.

Will you be able to go on vacation this summer?

There’s no chance that this summer will be a normal season for vacations either in the U.S. or internationally. But that doesn’t mean a trip will be impossible. People will just have to be smart about it. That could mean vacations closer to home, especially with gas prices so low. Air travel will be possible this summer, even if it is a very different experience than usual.

When does the expanded COVID-19 unemployment insurance run out?

The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.

You can find answers to more questions here.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.