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Boeing CEO balks at idea of government equity stake in exchange for coronavirus aid

Dave Calhoun, Chairman of Boeing.

Adam Jeffery | CNBC

Boeing CEO Dave Calhoun said it will take “a few years” for the company to get its balance sheet back to the levels it was at before the 737 Max crisis and the coronavirus pandemic, but he balked at the government taking an equity stake in the company in exchange for aid.

The Chicago-based airplane manufacturer is seeking $60 billion in government aid for itself and its suppliers as the industry faces the fallout from the outbreak.

Lawmakers are closing in on a deal for a massive stimulus package, which is expected to provide aid to industries including Boeing’s airline customers and potentially the company and its suppliers.

“The simpler, the shorter term in nature, the better,” Calhoun said in an interview on CNBC’s “Squawk Box.”

While lawmakers as of Tuesday evening were still working out the details of the plan, Calhoun on Tuesday told Fox Business Network that he opposed the government taking an equity stake in the company in exchange for aid.

“All we want is to make sure the credit markets are open for business,” he said. If the government requires an equity stake, “we just look at all the other options and we got plenty of them.”

Boeing has $15 billion in liquidity, and Calhoun expressed confidence that the company will make it through the crisis but said credit markets need to be open.

The company is burning a lot of that cash by continuing to pay its suppliers and employees without much revenue as its 737 Max is still grounded and airlines are now deferring orders since the virus has brought global travel to a near standstill.

“If there is no government support and the credit markets don’t reopen, it will be fairly quick, but we can still make it to the other side,” Calhoun said when asked what the company’s cash burn rate is. “Now if this goes on for eight months, probably not.”

The aviation industry are “at the point of the spear” of the virus and its impact, Calhoun said. Government aid would “keep our industry and people warm so when the recovery comes we’re ready to go.” 

Boeing has shut down production at its Seattle-area facilities, which make up the majority of its aircraft manufacturing, amid cases of the virus in the area with several cases among Boeing workers.

The company is a major defense contractor and said that the U.S. Department of Defense is working on accelerating payments, Calhoun said.

The company last week announced that it would suspend its dividend and said that Calhoun would forgo his pay, measures other companies have taken to save cash, while they wait for government aid.

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