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then the taxpayers can foot the bill

It's a contract with NASA. Taxpayers already are footing the bill.

I think they mean for the continued costs of correcting the issues. It's a fixed cost contract, and Boeing is currently on the hook for the runaway costs this mission is incurring.

Why would the government need or want to own a producer that is not capable of producing things profitably while competitors that can do so exist in the market?

I agree with you but since the government is not great at managing cost and budgets, and private industry is showing burgeoning capacity to develop orbital vehicles, maybe it would be in the national interest to steward a winding down of the business and transfer of assets to other industry participants.