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Boeing used to give more money to shareholders than it made. Now it’s getting stimulus help.

David Brancaccio, Rose Conlon, and Alex Schroeder Apr 1, 2020
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Scott Olson/Getty Images
COVID-19

Boeing used to give more money to shareholders than it made. Now it’s getting stimulus help.

David Brancaccio, Rose Conlon, and Alex Schroeder Apr 1, 2020
Scott Olson/Getty Images
HTML EMBED:
COPY

Aerospace giant Boeing is seen as a big winner in the $2 trillion economic stimulus law, having successfully lobbied for tens of billions of dollars for its industry.

Treasury Secretary Mnuchin said the other day Boeing isn’t asking directly for bailout money. Washington Post columnist Allan Sloan looked into the particulars of the crisis facing Boeing and joined “Marketplace Morning Report” host David Brancaccio to discuss.

David Brancaccio: Let’s talk about Boeing. They probably could use some help. You look at the numbers … didn’t have to be that way.

Allan Sloan: Since the beginning of 2014, they’ve shelled out $61 billion in stock buybacks and dividends, which is more than the cash their business has produced.

Brancaccio: So they could have, maybe, held some around for the rainy days that we are now in. But instead they parceled out some to shareholders, as capitalism would suggest.

Sloan: Well, yeah, but capitalism also suggests you’re supposed to have a safety margin. And if they had bought back less stock, they would have less need to borrow. And, in fact, in 2019 when they ran into problems because of stuff from their 737 Max crashes, they stopped buying back but they kept paying out very handsome dividends.

Brancaccio: Very handsome dividends. So when I said “parceled out,” that didn’t quite do justice to the amount of money.

Sloan: No, they didn’t parcel it out. They sent it out with a fire hose. They took all the money they had and more and gave it to the shareholders.

Brancaccio: There is a morality tale here about lots of stock buybacks and dividends: that things can change, and big companies need to remember that conditions can suddenly turn on a dime.

Sloan: So the deal is, if you’re going to take all the money you earn, and more, and shovel it out the door, sooner or later you’re going to run into a problem.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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