As the leaders of the U.S. Senate worked Wednesday to finalize details of a roughly $2 trillion emergency relief package, Sen. Maria Cantwell expressed doubt that Boeing will accept the direct government loans it offers.

Boeing, in response, said it’s premature to speculate before details of the final legislation emerge. The company late Wednesday issued a statement applauding passage of the Senate bill, saying it will boost the U.S. aerospace industry.

Cantwell, in an interview, welcomed the aid for the aviation world. But she cited  Boeing CEO Dave Calhoun’s recent comment that he didn’t want government taking an equity stake in the company in exchange for financial support.

Cantwell said the Senate bill includes $500 billion in support for large businesses, with up to about $85 billion of that for aviation, including airlines, aircraft repair firms, airports and aerospace manufacturers.

But the money comes with strings attached: The bill has specific limitations on executive pay, on payments to shareholders, and on share buybacks. And the loans it offers require the government receive warrants, which are options to buy stock.

“I saw what Calhoun said on TV,” Cantwell said. “My guess is they are probably not going to really pursue this.”

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“They are probably glad the loan program exists. They might [access it] in the future if things get really bad,” she said. “But Calhoun thinks he doesn’t need it.”

Speaking on Fox Business News on Tuesday, Calhoun said Boeing’s survival is not at risk. The company has $15 billion in cash on hand, he said, and the prospect of a thriving business again once the coronavirus crisis passes.

He said the key thing for Boeing is government action that will “reopen the credit markets” so the company can raise the cash it needs to keep going through the current virtual shutdown of aviation and the broader economy.

Last year, as Boeing bled cash because of the 737 MAX grounding, the company borrowed $25.4 billion, almost half of which was used to repay previous debt. This year, Boeing has already fully drawn down a $13.8 billion line of credit set up last month.

But while asking for access to more credit, Calhoun seemed to draw a hard line on taking money directly from government if that meant giving the taxpayers part ownership of the company.

“No one has an interest in retaining government equity in their company. If they force it, we just look at all the other options, and we have plenty of them,” Calhoun told Fox. “It’s not ideal if we don’t have it, but if they attach too many things to it, of course, you take a different course.”

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Cantwell outlined $500 billion in loans and $42 billion in grants to be allocated by the Treasury for larger businesses, including:

  • $25 billion in loans for passenger airlines, aircraft maintenance companies, and ticket agents
  • $4 billion in loans for cargo airlines
  • $17 billion in loans for businesses “critical to maintaining national security”
  • $454 billion in loans for other non-aviation businesses, states, and municipalities.
  • $25 billion in grants for passenger airline employee wages, salaries, and benefits
  • $4 billion in grants for cargo airline employee wages, salaries, and benefits
  • $3 billion in grants for airline contractors’ (like ground support and catering) employee wages, salaries, and benefits
  • $10 billion in grants for airports

Cantwell said the $17 billion in loans for businesses critical to national security is likely to be used for aerospace manufacturers, including Boeing, and their supply chain.

Boeing said last week it wants access to a minimum of minimum of $60 billion in  public and private financing, including loan guarantees, for the aerospace industry, including its supply chain. The $17 billion line item may represent the public part of that commitment.

Cantwell said all the federal loans are conditional on executive salaries being capped at 2019 levels. And for a period of one year beyond the terms of the loan, companies cannot pay dividends to shareholders nor buy back their own shares to support the stock price. Companies must also continue to honor current union contracts.

And she said it’s a requirement for all loans to publicly traded companies that the federal government take an equity stake.

“We’ll only give it if we have warrants,” she said would be the Treasury’s attitude. The U.S. government would then sell the shares back to the company at a future date at a predetermined price.

“Calhoun doesn’t want that,” she said. “They don’t want that complexity.”

Boeing spokesman Gordon Johndroe said it’s too early to judge.

“The final bill text has not been released,” he said. “No specific companies are called out in this bill, so it is premature to presume what Boeing would or could receive, and what provisions any support might include.”

And even assuming the House and Senate pass the bill quickly and the President signs it immediately, then the Treasury Department must work out the details of how exactly the money is disbursed.

For grants, Treasury Secretary Steven Mnuchin will have to issue procedures within five days and make the initial payments 10 days after enactment. For loans, Mnuchin has to issue the procedures for loan applications and minimum requirements within 10 days.

“This will take some time,” Johndroe said.

On a broad level though, in a statement Wednesday night Boeing praised the Senate bill.

“The bill’s access to public and private liquidity, including loans and loan guarantees, is critical for airlines, airports, suppliers, and manufacturers to bridge to recovery,” Boeing said.

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