Boeing could be hurting long after airlines recover from coronavirus outbreak

SEATTLE -- The largest private employer in Washington state could get hit the hardest over the coronavirus outbreak.

Boeing was already struggling before the outbreak reached the United States and now it could be one of the last to recover when it's all over.

The aviation industry as a whole has plunged as the virus spreads, so much that the Trump administration is considering a $60 billion bailout request from Boeing and the airline industry.

"We have to help Boeing," President Donald Trump said earlier this week. "We have to help the airline industry. It wasn't their fault. This wasn't their fault."

"Right now, because of the virus, people are hesitant to travel," said Jeff Shulman, a professor of marketing at University of Washington who studies growth in the Seattle area. "Even after the virus subsides, the economic impact of this is going to be profound. Discretionary purchases on travel is going to be diminished and that's going to affect the airlines, which in turn are less likely to be ordering planes from Boeing and might even start canceling or delaying some of the orders they have."

Boeing has already taken huge hits in the stock market, losing roughly 70 percent of its value in 2020.

A Wall Street Journal article Thursday said Boeing is considering layoffs at its plants. The company is also facing pressure from its own employees to temporarily close the Everett plant, which has seen several COVID-19 cases.

When Boeing struggles, the ripple effects stretch beyond its own employees to local suppliers that depend on Boeing's business and businesses that depend on Boeing employees.

"If you look back to 2001 after 9/11, Boeing shed tens of thousands of jobs and so we could see that if Boeing struggles through this crisis, that there will be a lot of jobs potentially lost here in the region," Shulman said.

Shulman's advice to Boeing employees is to put off discretionary spending, hope for the best and prepare for the worst.

Meanwhile, Congress and the Trump administration are left to consider an aviation industry bailout.

In a statement, the company said, "Boeing supports a minimum of $60 billion in access to public and private liquidity, including loan guarantees, for the aerospace manufacturing industry.  This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery."

Washington Rep. Rick Larsen, D-Everett, serves on the House subcommittee on aviation and told Q13 News any possible bailout would come with serious stipulations.

"I don’t think it’s just going to be a matter of handing taxpayer money over to these larger businesses," Larsen said. "We’re going to put conditions on them like we did before so the taxpayer is made whole if in fact we take that step."

He said a potential rescue package should not be thought of as a deal just for big business.

"When we talk about airlines or aviation, we’re really talking about a lot of women and men who are being impacted by this as well," Larsen said. "It’s not just companies, it’s women and men who work there."