Boeing announced that it has reached a tentative agreement with the International Association of Machinists and Aerospace Workers (IAM), the union representing approximately 33,000 workers in the Pacific Northwest.
The deal, proposed on Sunday, if approved by union members, would avert a potential strike that was set to take place later this week.
The proposed four-year contract includes a 25% wage increase for employees, as well as a commitment from Boeing to build its next commercial airplane in the Seattle area. This agreement marks the first full labor deal between Boeing and the union in 16 years.
In addition to wage increases, the contract offers improved retirement benefits and greater union input into safety and quality measures in Boeing’s production system. Boeing Commercial Airplanes President and CEO Stephanie Pope emphasized the company’s dedication to its workforce and the Pacific Northwest region, calling the proposal a “historic offer” that strengthens job security and community ties.
The union’s bargaining committee has recommended that members ratify the contract in a vote scheduled for Thursday. If approved, the agreement will ensure continued aircraft production at Boeing’s facilities in Washington, including the development of the 737’s replacement model.
While the deal has been welcomed by both parties, union members must still vote on whether to accept the contract. Should they reject it, a strike could begin as early as Friday if two-thirds of workers support a work stoppage.
Boeing has faced a challenging year, including production delays due to quality control issues and a shift in leadership following the resignation of former CEO Dave Calhoun. The proposed agreement comes as the company looks to stabilize operations and recover from recent setbacks.
FOX Business, KOMO News, and Fortune contributed to this.