Dividends and Should the the US rescue Boeing

Before the coronavirus, Boeing was finally fixing the problem it had with the Max737 and production was likely to begin. Then came the virus which has essentially shut down the aviation industry. Not many people flying. What should the government do?

In an article by Natalie Kitroeff and Kenneth P Vogel of the New York Times News Service, the issue of Boeing is complex. Boeing is the largest aerospace company in the US and is the second largest military contractor. With its various operations it was seeking funding in at least 3 of the federal assistance programs established by the $2 trillion coronavirus relief package. At first, the company said it would not apply, however a day passed and the company is in talks with Washington to receive money. Most taxpayers are hoping the money comes with some strings attached.

If production of the Max 737 is started again, Boeing would employ more than 150,000 direct workers and more than 1 million through the supply system chains. For a company which said it would not take money, Boeing has hired 2 New York investment banks – Lazard and Evercore to advise them how to get money from the Treasury or through the stimulus program. Boeing’s lobbyists in Washington has been regularly consulting the Treasury department.

Linking to dividend paying stocks, the advantages companies that typically make profits is the eco system attached to Washington and state capitals to ensure there is government assistance when needed. The Board of Directors will have a number of options to receive money.

There are more questions than answers, till the next time – to raising questions.

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