Defense Implications of Challenges at Boeing (CRS Report for Congress)
| Release Date |
Nov. 4, 2024 |
| Report Number |
IN12455 |
| Report Type |
Insight |
| Authors |
Jennifer DiMascio; Alexandra G. Neenan |
| Source Agency |
Congressional Research Service |
Summary:
The Boeing Company (Boeing), a supplier of equipment and services to the U.S. Department of Defense
(DOD), has since 2018 faced challenges including labor actions, production delays, quality control
problems, and financial losses on government contracts. Given Boeing’s importance to the defense
industrial base, Congress may assess whether or not these developments have implications for U.S.
national security.
Boeing is the United States’ largest manufacturer of commercial airliners. Boeing’s financial difficulties,
therefore, affect both its defense and commercial aircraft businesses. In 2018 and 2019, Boeing’s 737
Max airliner experienced fatal crashes. Since that time, Boeing has faced safety, legal, and financial
problems. On September 13, 2024, Boeing machinists went on strike for eight weeks, which reportedly
cost the company $1 billion a month. On November 4, the union accepted a contract offer for a 38% pay
increase. To shore up its finances, Boeing, on October 15, filed papers with the Securities and Exchange
Commission saying that Boeing plans to raise up to $25 billion through a stock and debt offering. Boeing
reportedly plans to lay off 10% of its workforce, or about 17,000 employees. Some analysts have
speculated that Boeing could declare bankruptcy or seek to sell elements of its space or defense business.
