Boeing Faces Junk Rating As Moody’s Warns Of ‘Execution Risk’ During Strike
The Boeing Company‘s (NYSE:BA) credit rating may be lowered to junk as a strike stands to cripple production and cash flow.
Aircraft assembly workers walked off the job early Friday morning after rejecting a contract offer presented by Boeing and the International Association of Machinists and Aerospace Workers (IAM) that would have boosted wages by 25% over four years.
The striking machinists produce the 737 Max, Boeing’s top-selling airliner, the 777 jet and the 767 cargo plane. The walkout likely will not stop production of Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina, the Associated Press reported.
Jefferies aerospace analyst Sheila Kahyaoglu estimated a 30-day strike could cost Boeing $1.5 billion.
Moody’s Investment Ratings on Friday said it will look at how a prolonged strike may impact Boeing’s ability to raise cash and make the 737 and 787 models.
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