Boeing Co. shares jumped after the company unveiled plans to restart jetliner manufacturing in the Seattle area next week, ending a shutdown that began last month because of the Covid-19 pandemic.
About 27,000 people will return to final assembly lines for twin-aisle jets such as the 747, 777 and 787 Dreamliner, the company said in a statement Thursday. Boeing will also resume its work toward restarting production of the 737 Max, which was halted in January. The Max has been grounded for more than a year after two deadly crashes.
Boeing Chief Executive Officer Dave Calhoun said a deal between U.S. airlines and the Treasury Department on a $25 billion aid package helped boost the planemaker’s confidence in reopening its largest industrial center amid the unprecedented crisis. Air-travel demand has dwindled to almost nothing as governments urge people to stay home, prompting carriers to park thousands of jets. But the U.S. airline aid enables Boeing to plan for the longer term.
“Our industry took a step on the long road to recovery from the Covid-19 crisis this week,” Calhoun said in a message to employees.
‘Willing to Borrow’
The CEO also hinted that Boeing is closing in on a deal of its own to boost financial reserves.
“Our industry will need the government’s support, which will be critical to ensuring access to credit markets and likely take the form of loans versus outright grants,” Calhoun said.
Boeing is focusing on “the best ways to keep liquidity flowing through our business and to our supply chain until our customers are buying airplanes again,” he said. “We continue to believe strongly in the future of aviation and of Boeing as the industry leader and are willing to borrow against that future.”
The shares surged 8% to $145 after the close of regular trading in New York. Boeing had tumbled 59% this year through the end of Thursday’s trading session, the worst performance on the Dow Jones Industrial Average.
Boeing is summoning employees back to its factories at a time when infection rates are starting to plunge in Washington state, an early hot spot of the virus outbreak. A 787 Dreamliner plant in North Charleston, South Carolina, will remain closed for now.
The Chicago-based company sent shock waves through its supplier base when it halted Seattle-area operations last month after its first employee died of the Covid-19 virus. General Electric Co., Spirit AeroSystems Holdings Inc., and Triumph Group Inc. are among the companies that curtailed or suspended work and laid off thousands of employees.
Executives and senior managers will start reporting to Boeing plants Friday, followed by lower-level managers and overnight factory workers on April 20. The manufacturer continues to advise those who can do so to work from home.
Boeing is adopting a phased approach to getting is factories back on track, with staggered shift times. It will also require face coverings and use floor markings and signs to create physical distance. The company will provide protective gear for employees where distance can’t be maintained.
“This phased approach ensures we have a reliable supply base, our personal protective equipment is readily available and we have all of the necessary safety measures in place to resume essential work for our customers,” said Stan Deal, head of the company’s jetliner division.