Boeing Troubles Continue
Boeing has had a rough couple of years, starting with two separate 737 MAX crashes in October 2018 and March 2019, respectively, which killed a combined 346 people.
Boeing saw net total orders drop to negative 87 airplanes last year, its worst in decades. For comparison, its main competitor Airbus saw a net 768 orders last year.
Boeing's troubles continued into this year as production of the 737 MAX continues to remain halted. In January, Boeing reported zero net orders, while in February the company reported negative 28 net orders.
With Boeing already facing significant challenges, the coronavirus outbreak has added additional pressure to the company.
Boeing has made a handful of moves over the last month to bolster its financial position. The company drew down its entire $13.8 billion secured loan, halted hiring, suspended its dividend, as well as offered voluntary layoffs and early retirement packages.
Boeing is also seeking federal aid from the U.S. government, but won't do so if it requires the government to take an equity stake in the company.
Over the weekend Boeing announced it is "extending the temporary suspension of operations at all Puget Sound area and Moses Lake sites until further notice" after about 135 Boeing employees have tested positive for COVID-19.
"These actions are being taken in light of the company’s continuing focus on the health and safety of employees, current assessment of the spread of COVID-19 in Washington state, the reliability of the supply chain and additional recommendations from government health authorities," Boeing said in a statement.
The decision affects about 30,000 production employees, who will no longer receive pay after Wednesday. Despite still receiving medical benefits, they now must take vacation and sick time or apply for unemployment.
With things at Boeing going just about as badly as possible, it will be interesting to see how the company comes out of all of this. Even once the coronavirus subsides, Boeing is still faced with its 737 MAX issues and lack of any net orders for its airplanes.
701,000. March non-farm payrolls dropped by 701,000 as the unemployment rate hit 4.4%, ending a streak of 113 months of job gains. March marked the first decline in monthly non-farm payrolls since September 2010 and fell short of the 800,000 jobs lost during the peak of the financial crisis in May 2009. The unemployment rate jumped nearly a full percentage point, hitting its highest level since August 2017. Nearly two-thirds of the job losses were in the hospitality industry, which has been hit by the outbreak of COVID-19. The coming months are likely to see larger job losses as the full extent of the coronavirus' effect on the economy has yet to be realized.
Walmart limits customers. In an effort to promote social distancing, Walmart announced it will allow no more than five customers per 1,00 square feet of store space. Once stores reach capacity, customers will be admitted on a "1-out-1-in" basis. The company will also institute one-way movement through aisles in an attempt to reduce the amount of close contact people have with each other. "The health and safety of our associates and customers is what matters the most," Walmart said.
No more exports. U.S President Donald Trump has invoked the Defense Production Act to ban exports of N-95 respirators, surgical masks, gloves and other personal protective equipment. "To ensure that these scarce or threatened PPE materials remain in the United States for use in responding to the spread of COVID-19, it is the policy of the United States to prevent domestic brokers, distributors, and other intermediaries from diverting such material overseas," the White House said.
Tesla cuts contractors. Tesla is letting go of contractors at its vehicle factory in Fremont, California and its battery factory outside of Reno, Nevada. The job cuts reportedly affect "hundreds" of employees. "It is with my deepest regret that I must inform you that the Tesla factory shutdown has been extended due to the COVID-19 pandemic, and as a result, Tesla has requested to end all contract assignments effective immediately," read a memo from the contractors' staffing agency.
Neiman Marcus is in trouble. Neiman Marcus is reportedly seeking bankruptcy protection as the department store chain was forced to close stores as a result of the coronavirus. Neiman Marcus has stepped up discussions with lenders and bondholders about financing, which would enable the company to continue to operate while under bankruptcy protection. Neiman Marcus declined to comment, but said last month it is "evaluating all courses of action to preserve our financial strength."