The potential impact of Boeing’s crisis concerning its fuel-efficient, world-popular 737 Max grounding on the U.S economy at large has been the talk of the financial market in the past few months. In his comment on Wednesday, the U.S President Donald Trump extended on the same idea and urged Boeing’s new CEO to take all the necessary measures to get over the complications that have been hurting the U.S economy for almost a year.
U.S GDP Can Drop By 0.5% In 2020 If Boeing’s Crisis Continues
President Trump also highlighted studies that hinted at the possibility of the U.S GDP taking a hit of 0.5% in 2020 if Boeing’s crisis penetrated deeper into the year. Trump addressed Greg Smith, the current Chief Financial Officer of Boeing in the officializing ceremony of the phase 1 trade deal with China and stated:
“Get that going. Work together. We’ve got to get that one moving fast and it’s going to be better than ever I think.
As per Boeing’s previous announcement, production for 737 MAX is likely to temporarily be paused later this month. The halt along with the uncertainty regarding when the jetliner will be cleared for commercial flights, Boeing’s largest supplier, Spirit AeroSystems Holdings, declared last week that it will be cutting over 20% of its workforce in the upcoming weeks.
In his address on Wednesday, Trump also expressed confidence in the new CEO, David Calhoun’s ability to make the necessary amendments and get Boeing back on its feet very shortly. Calhoun has served Boeing as a director for almost a decade. According to Reuters, on the other hand, the Federal Aviation Administration (FAA) is certain to not clear the jetliner for service by the end of February. Depending on the circumstances, the ban can be extended further into March and even to the months after that.
Boeing Dropped By Around 25% In The Stock Market In 2019
While talking to Fox News Sunday, U.S Treasury Secretary (USTR), Steven Munchin, also highlighted on Sunday that it is beyond doubt that the U.S GDP is likely to take a significant blow this year due to the ongoing Boeing’s crisis. He further stated that being the largest U.S exporter, the ban on its most popular jetliner has the potential to push the GDP down by 50 basis points in 2020.
Boeing is currently exchanging hands at $330 in the stock market that marks an around 25% decline for the U.S plane manufacturer as compared to 2019’s high of $440 in March.