Where is the Bottom for Boeing?

Boeing is not-so-boldly departing the space business.

On Friday, The Wall Street Journal reported that the mired-in-constant-disaster aerospace manufacturer is considering a sale of its space unit, among other assets. The news comes as the bottom line at Boeing grows more tenuous. And who knows? Maybe whoever buys the division will be able to bring back the astronauts that Boeing’s malfunctioning aircraft left (safely) stranded on the International Space Station.

The Final Frontier

Boeing hasn’t had a good week in quite some time. And yet, last week proved particularly bad. The company posted a staggering $6 billion loss in its third quarter (CEO Kelly Ortberg had already announced plans to lay off roughly 10% of employees). Within hours, Ortberg received more bad news. By late Wednesday evening, Boeing’s 33,000 striking machinists in the Pacific Northwest — who have maintained their work stoppage for six weeks so far — voted to reject the latest contract offer from the company, which included a 35% pay raise. The remaining sticking point for strikers: the return of an employee pension plan.

No workers means no new planes built, which means no new sales, which means gigantic losses could mount in Boeing’s last quarter of the year. It’s no wonder that the company is considering an asset sale to scare up some quick cash. But its space business resembles its plane business in one key respect — both are imperiled:

• Boeing’s space unit is housed within its defense division, which posted a $3.1 billion loss on $18.5 billion of revenue through the first three quarters of the year.
• The company’s already spent over a year seeking a buyer for the United Launch Alliance, the rocket launch venture it co-owns with Lockheed Martin, sources told the WSJ; a Jefferies analyst estimated it could be valued at up to $3 billion. Sources also told the WSJ that Boeing has held discussions with Jeff Bezos’ Blue Origin about possible asset sales.

Ortberg noted in a call with analysts in August that, aside from Boeing’s core commercial and defense businesses, any asset sale is on the table.

Spirited Away: The knockdown effects of Boeing’s tailspin continue to be felt. Key supplier Spirit AeroSystems has already furloughed some 700 employees in Wichita, Kansas. On Thursday, a spokesperson told CNBC that Spirit is now weighing furloughs, and possible layoffs, of hundreds more workers if Boeing can’t strike a deal with its machinists by Nov. 25.