Boeing Explores Exit from Space Sector as Part of Strategic Review
29th Oct 2024
The Walls Street Journal reports hint that Boeing is looking to sell its space business. This possible sale is a strategic move by the firm’s CEO, Kelly Ortberg, to help improve the firm’s financial performance in light of its current stand.
Currently, there is no news on potential buyers of the space business and no official statement on the acclaimed sale.
Boeing’s dwindling financial stand
Over the past few months, Boeing has come under internal and external pressure.
Following an accident on 5 January 2024, Boeing CEO Dave Calhoun was affected by a management reshuffling, which led to his resignation. The accident was caused by a faulty door plug that blew out of a relatively new Boeing 737 Max mid-flight.
Replacing Dave Calhoun in August 2024 was Kelly Ortberg, and things haven’t been all rosy since he joined the firm.
With over 32,000 staff on strike, Boeing has recorded over £5.9 billion (~$7.6 billion) in economic losses, and market forecasts suggest that it will only get worse.
Boeing to resort to lay-offs or the sale of its space business to manage its losses
To save this seemingly sinking ship he now captains, Kelly Ortberg might fire some staff members and sell the Boeing space business.
The firm has not given any official statement on the possible sale of its space business.
Instead, a spokesperson from the firm when asked for comments said that the company “doesn’t comment on market rumours or speculation.”
While there is no official information on the sale of the Boeing space business, Kelly Ortberg points out that the firm might cut its staff.
In a statement on Wednesday, the new CEO points out that Boeing is better off “doing less and doing it better than doing more and not doing it well.”
This might indicate not only a massive job cut but also a halt in the firm’s hiring process.
Such a lay-off will force Boeing to focus on the designing and manufacturing of its core products like commercial planes and defence assets.
Despite working with NASA for years, Boeing’s space business is not one of its strengths, as issues with the recent Starliner launch have marred its performance.
Boeing, turns to stocks to offset its financial losses
On 28 October 2024, Boeing launched a dual stock offering, which financial analysts say could raise close to £14.64 billion (~$19 billion).
The firm is looking to sell £3.8 billion (~$5 billion) in depositary shares and 90 million common stock shares, which could raise more than £10.7 billion (~$13.95 billion).
According to Boeing, the money it generates from this sale will go towards corporate needs. These include paying debts, generating working capital, and investing in its subsidiaries.
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