Boeing sells subsidiary to help raise $25 billion amid strike
Boeing has sold its small defense subsidiary, Digital Receiver Technology (DRT), as part of its plan to raise $25 billion, reports a Kazinform News Agency correspondent.
The company aims to raise this amount through new stock and debt over the next three years to improve its financial situation but has already begun taking action. According to Reuters, DRT, based in Maryland, manufactures surveillance equipment for the U.S. military and designs advanced radio systems used by intelligence and defense agencies.
Boeing sold DRT to Thales Defense & Security, a division of Thales SA, Europe’s largest defense electronics company, which is also based in Maryland.
The financial details of the deal haven’t been disclosed, so it’s unclear how much it will help the company reach its $25 billion goal.
On Friday, Boeing’s new CEO, Kelly Ortberg, announced plans to cut 17,000 jobs and delay the launch of the new 777 airliner. The company has already spent over $1 billion and had $10.3 billion in cash and securities at the end of September. One of the biggest problems Boeing faces is a strike by 33,000 machinists, which has stopped production for more than a month. The union will vote on a new deal on Wednesday, which would raise wages by 35% over four years and give workers $7,000 bonuses for agreeing.
Layoffs are also affecting Spirit AeroSystems, which Boeing is buying for about $4.7 billion. Spirit announced that 700 workers will be furloughed for three weeks this month. If the union can’t make a deal by the end of next month, the furloughs will become layoffs.
Kazinform News Agency earlier reported that Boeing plans to borrow $10 billion from major banks and raise $25 billion through stock and debt sales to recover from losses, with its debt expected to reach $53 billion by mid-2024. Additionally, the union strike that began on September 13 has halted operations, costing Boeing $1 billion per month.
