Moody's Threatens to Downgrade Boeing to 'Junk'

Credit Rating Agency Cites Concerns Over 737 Max and 787 Dreamliner Issues

Moody's Investors Service has warned Boeing that it may downgrade the company's credit rating to "junk" status, citing ongoing concerns about the company's 737 Max and 787 Dreamliner aircraft.

737 Max Woes

The 737 Max has been grounded since March 2019 following two fatal crashes that killed 346 people. Boeing has been working on a software fix for the plane, but the timeline for its return to service remains uncertain.

Moody's said the grounding of the 737 Max has "significantly weakened" Boeing's financial performance and reputation. The agency estimates that the grounding has cost Boeing over $19 billion.

787 Dreamliner Problems

The 787 Dreamliner has also faced production issues, including problems with the plane's electrical system. Boeing has been forced to halt deliveries of the Dreamliner several times, and it is unclear when the issues will be resolved.

Moody's said the Dreamliner problems have "further damaged" Boeing's reputation and have raised concerns about the company's ability to manage its supply chain.

Downgrade Warning

Moody's said it could downgrade Boeing's rating to "Ba1" from its current "Baa3" rating. A downgrade to "junk" status would make it more expensive for Boeing to borrow money and could lead to further financial problems.

Boeing said it is "disappointed" with Moody's warning but remains confident in the long-term prospects for its business.