Is it possible for a company like Boeing to go bankrupt because of such a crisis ?
https://www.theverge.com/2019/10/23/20927213/boeing-737-max-...
Not only does Boeing produce a large number of military aircraft for the US armed forces, but their commercial arm also allows the US to project power world wide.
"Too big to fail" describes a concept in which the government will intervene in situations where a business has become so deeply ingrained in the functionality of an economy that its failure would be disastrous to the economy at large. If such a company fails, it would likely have a catastrophic ripple effect throughout the economy.
https://www.investopedia.com/terms/t/too-big-to-fail.asp
The "too big to (let) fail" theory asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by government when they face potential failure.[1] The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois.[2] The term had previously been used occasionally in the press.[3]
Boeing in Chapter 7 wouldn't kill the US economy. It would just dent it badly, and give competitors from other countries (China? India?) an in to a large market.
But the US military machine would be very badly damaged if Boeing failed. And there would be spectacular political fall out, both internally and internationally - some of which is already happening with the tarnished reputation of the FAA.
Aerospace is one of those prestige industries that is as much about promoting national status as about making money. A major failure would be very bad indeed for America Inc - survivable in practical terms, but a disfiguring and ugly wart on the face of the mythology.
The government would absolutely provide debtor-in-possession financing if no one else would, but even that is extremely unlikely, since there are so many saleable assets.
It seems pretty likely to me that the government would prefer a Chapter 11 restructuring.
Will it? Probably never, it's too much of a tool used by the US Government to ever go bankrupt.
Of course, the US government would never allow Boeing to go out of business completely, as in a chapter 7 bankruptcy.
But a chapter 11 bankruptcy, in which Boeing the business survives but its current stockholders lose everything? Not inconceivable it might happen some day, and I can't see why the US government would feel it necessary to stop that. Customers only care about the firm's products and services still being available to purchase at a reasonable price, if the stockholders lose everything that's not their problem.
Out of curiosity, do you think they wouldn't let it even get that far to make sure they stay competitive vs Airbus?
So I don't think Boeing will be filing for chapter 11 any time soon. But in 5, 10, 15 years from now? Anything could happen. Maybe they'll turn the corner from this episode, and their business will have a very bright future. Maybe they get stuck in the doldrums, and then chapter 11 might slowly become more plausible as an ultimate outcome.