Boeing’s finances are a multibillion-dollar concern for the firm, its employees, suppliers, and airline customers. The good news is that they’re unlikely to have a significant impact on the typical American.

After 33,000 International Association of Machinists members went on strike against the corporation a month ago, Boeing will be unable to deliver all of its jets as planned. This will affect airlines and may have little influence on the quantity of available seats, particularly on domestic flights within the United States.

Fewer seats may compel airlines to increase fares. However, fares are currently falling due to excess capacity in the business and insufficient demand for flights. Many of the planes that were not delivered were most likely intended to replace older, less efficient planes.

What Boeing’s Massive Financial Crisis Means For You

So the impact will not impair your capacity to fly. The planes held by airlines have already been sold. Just like no one took your Chevy away from you during the automakers’ strike last year, Boeing jets in operation will remain in service.

However, Boeing’s financial woes, which began long before the strike, could have a negative impact on the US economy in general.

Boeing’s cash crunch
Boeing has been losing money for more than five years, ever since two disastrous 737 Max crashes in late 2018 and early 2019 killed 346 people and forced a 20-month grounding of the company’s best-selling airliner.

Since then, Boeing has posted core operating losses totaling more than $33 billion, with no end in sight. According to credit rating agency Standard & Poor’s, the strike began on September 13 and is causing the corporation to lose $1 billion every month. The issue is that the 737 Max’s production halt has cut off the company’s most vital source of funding, which derives the majority of its revenue from aircraft sales at the time of delivery.

Boeing plans to raise up to $25 billion to weather the current storm through increased borrowing, stock sales, and debt issuance. In addition, it intends to eliminate 10% of its global workforce, or approximately 17,000 out of 171,000 people, in order to save money. The layoffs will harm those employees, as well as the 33,000 strikers who will get a percentage of their normal wage in the form of strike compensation from the union.

Hit to the economy
Boeing’s financial problems are harmful to the US economy. It is the nation’s biggest exporter. And, more immediately, businesses in communities where laid-off Boeing employees and strikers dwell, primarily in Washington state, may face challenges when those people cut back on spending. The strike’s influence on suppliers, on the other hand, will cause financial issues to expand beyond Boeing. Boeing has 10,000 suppliers throughout all 50 states. It estimates that its annual contribution to the American economy is $79 billion, which supports 1.6 million employment directly and indirectly.

According to Anderson Economic Group’s study, losses for Boeing employees, strikers, suppliers, and the company itself, as well as local governments, have already exceeded $5 billion in the first month of the strike.

What Boeing’s Massive Financial Crisis Means For You

Boeing’s credit rating is at risk of being reduced to junk bond status, which would exacerbate its financial problems by increasing borrowing costs. Junk bond status indicates a heightened risk of default and maybe insolvency. However, just because it is forced to file for bankruptcy does not mean it will go out of business. It simply means that Boeing would use the bankruptcy procedure to discharge some of its unsustainable debt and other obligations. Numerous profitable corporations, like General Motors and the majority of the nation’s airlines, have declared bankruptcy and then reported record profits.

And Boeing is unlikely to be put out of business by the current financial crisis. Boeing and its European rival Airbus are practically the only businesses that manufacture full-size jets for the worldwide airline sector. Its status as part of a duopoly virtually guarantees its longevity.

SOURCE | CNN

Amazon announced on Wednesday that it was investing in small nuclear reactors, just two days after Google made a similar statement, as both tech titans seek new sources of carbon-free electricity to meet rising demand from data centers and artificial intelligence.

The intentions come after the owner of the decommissioned Three Mile Island nuclear power plant announced last month that it intends to restart the reactor so that internet giant Microsoft can purchase power to run its data centers. All three firms have invested in solar and wind technologies that generate electricity without emitting greenhouse gases. They now believe they must go further in their search for clean electricity to meet both demand and their own promises to reduce emissions.

Nuclear energy is a climate solution because its reactors do not emit the planet-warming greenhouse gases produced by power plants that use fossil fuels like oil, coal, and gas. The global need for power is increasing as buildings and cars electrify. Last year, more people used electricity than ever before, putting pressure on global electricity infrastructure. Data centers and artificial intelligence account for a significant portion of demand.

Amazon, Google Make Dueling Nuclear Investments To Power Data Centers With Clean Energy

The International Energy Agency predicts that data centers’ overall electricity usage will exceed 1,000 terawatt hours by 2026, more than tripling from 2022. According to estimates, one terawatt hour can power 70,000 houses for a full year.

“AI is driving a significant increase in the amount of data centers and power that are required on the grid,” Kevin Miller, Amazon Web Services vice president of global data centers, told The Associated Press. “We view advanced new nuclear capacity as really key and essential.”

Energy Secretary Jennifer Granholm expressed her delight that Amazon has become the latest company to “BYOP” or “bring your own power” in the construction of data centers. Granholm spoke during an event commemorating Wednesday’s announcement at Amazon’s second headquarters in Virginia. Virginia’s governor and two U.S. senators were also present.

The United States plans to achieve 100% clean electricity by 2035. Granholm described compact modular reactors as a “huge piece of how we’re going to solve this puzzle,” a strategy to phase out fossil fuel power while meeting rising electricity demand from data centers and new manufacturers. She stated that her agency will provide $900 million to deploy more of these reactors.

Small modular reactors are nuclear reactors that can produce up to one-third the power of a conventional reactor. According to developers, compact reactors will be developed faster and at a lower cost than large power reactors, with the ability to scale to meet the needs of a specific site. They hope to start producing electricity in the early 2030s if the Nuclear Regulatory Commission approves their designs and the technology works.

If new, clean power is not added as data centers are built, the United States risks “browning the grid,” or including more power from non-clean sources, according to Kathryn Huff, a former U.S. assistant secretary for nuclear energy who is now an associate professor at the University of Illinois Urbana-Champaign.

The reactors are currently in development, and none are currently powering the US electric system. Big investors can help change that, and these announcements could be the “tipping point” that allows for the true scalability of this technology, according to Huff.

Jacopo Buongiorno, professor of nuclear science and engineering at the Massachusetts Institute of Technology, agreed, stating that the industry requires customers who value nuclear’s dependability and carbon-free attributes and are willing to pay a premium for it at first until a number of next-generation reactors are deployed and the cost falls.

Amazon, Google Make Dueling Nuclear Investments To Power Data Centers With Clean Energy

On Monday, Google said that it had signed a contract to purchase nuclear energy from multiple tiny modular reactors that Kairos Power, a nuclear technology startup, intends to create.

The announcement focuses on “the technologies that we’re going to need to achieve round-the-clock clean energy, not only for Google but for the world,” according to Michael Terrell, Google’s senior director of energy and environment.

Google intends to have the first small modular reactor online by 2030, with others to follow through 2035. The deal is expected to add 500 megawatts of power to the system. Google used more than 24 terawatt hours of electricity last year, according to its annual environmental report. One terawatt is equivalent to 1,000,000 megawatts.

Meanwhile, Amazon announced on Wednesday that it is partnering with utility Dominion Energy to investigate the possibility of locating a small modular reactor near its current North Anna nuclear power facility in Virginia. It is investing in reactor developer X-energy for early development work and partnering with regional utility Energy Northwest in central Washington to locate four of the X-energy reactors.

The three announcements might total more than 5,000 megawatts of power by the late 2030s, with the possibility of even more. All of this likely accounts for only a small portion of Amazon’s total energy consumption, which the corporation does not disclose publicly.

According to Doug True, chief nuclear officer at the Nuclear Energy Institute, new reactor designs are well-suited to industrial applications since they can be installed on a small footprint and deliver reliable power, with some also capable of providing high-temperature heat on-site.

“It seems like a really good fit to support those facilities, and for a lot of different applications depending upon the amount of power that’s needed by the customer,” he told me.

Both Amazon and Google have pledged to use renewable energy to combat climate change. Google has vowed to achieve net-zero emissions by 2030 and to use carbon-free energy on all of its grids. It claims to have already matched 100% of its global electricity use with renewable energy purchases on an annual basis. However, the company has fallen short in reducing its emissions.

Amazon had stated that it would equal all of its global electricity use with 100% renewable energy by 2030, and it recently revealed that it had fulfilled that objective early in 2023. Though the company has matched its usage by purchasing an equal amount of renewable energy, this does not necessarily imply that it is using it to power its activities.

According to Amazon’s 2023 sustainability report, direct emissions (Scope 1) climbed by 7% while electricity emissions decreased by 11%. The corporation also intends to achieve net zero carbon emissions by 2040.

SOURCE | AP

(VOR News) – The Financial Markets Authority (FINMA) published a statement on Tuesday declaring that UBS needs to improve its crisis preparation in order to guarantee that its activities might be terminated without causing wider financial market volatility.

This statement was provided in response to a request made by UBS. UBS has said that it has put its resilience plan on hold, according to a statement released by the Swiss regulator.

This data was supplied in accordance with the declaration. This strategy is a plan that is submitted to the appropriate authorities for approval once a year.

In light of the fact that UBS is aiming to purchase its competitor Credit Suisse in the year 2023, it has come to light that the emergency protocol of the company needs to be modified.

This is due to UBS’s planned acquisition of Credit Suisse.

The Financial Markets Association stated, “In light of the Credit Suisse crisis, further measures are necessary to enhance crisis preparedness and resolution strategies for systemically important banks.” This is the declaration.

According to the official statement released by the firm, “UBS’s resolution planning needs to be further developed in order to increase the options for action that are available in the event that there is a risk of insolvency.”

“It must be possible to exit the market by selling or winding down individual business segments as well as selling the bank without jeopardising the stability of the financial system and without using taxpayers’ money.”

More specifically, the Financial Markets Authority (FINMA) has underlined that there ought to be a greater emphasis placed on measures that promote liquidity. This suggestion is intended to be more precise. The significance of this cannot be overstated because it ensures that financial institutions have adequate cash reserves in the event that there is a surge in the demand for money withdrawals.

In addition, in order to ensure that UBS is fully integrated with Credit Suisse, it was necessary for the company to combine its organizational structures, operational procedures, and information technology platforms. To achieve the aforementioned objective, this action was taken with the intention of achieving it.

FINMA has issued a statement stating that its requirements are in conformity with the recommendations that were included in the TBTF (too large to fail) research that was published earlier this year by the Swiss Federal Council. The study was titled “too large to fail.”

The UBS study was, all things considered, “too big to fail.”

Following the occurrence of the financial crisis that took place in 2008, the installation of TBTF limitations was carried out with the objective of strengthening the stability of banks and minimizing the damage that was caused by failures.

This was done in order to achieve the aforementioned goals simultaneously. Throughout the course of this procedure, this compilation of rules is being examined on a regular basis.

The decision to acquire its competitor, Credit Suisse, was made by UBS as a result of the fact that it had lost the faith of both its customers and its investors, which in turn prompted the markets to get unhappy and led to widespread withdrawals.

As a result of the fact that UBS has emerged as the country’s last large global bank, the authorities are ready to make use of the mistakes that have been made in the past in order to gather information.

It is essential to bring attention to the fact that the Financial Industry Regulatory Authority (FINMA) has been advocating for expanded jurisdiction to oversee lenders.

UBS has announced that it has already begun the process of establishing its emergency measures “in a targeted manner” in reaction to the news that was released on Tuesday. This information was disclosed in response to the news on Tuesday.

SOURCE: EN

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