Boeing and the International Association of Machinists and Aerospace Workers (IAM) have reached a new contract agreement, which could bring an end to the seven-week strike that has significantly impacted the aerospace company’s operations and finances.
The union, representing roughly 33,000 workers, is encouraging its members to vote in favor of the proposal, describing it as an opportunity to “lock in these gains and confidently declare victory.” A vote on the contract is set for Monday.
The tentative agreement features a 38% wage increase over the contract’s duration, a bump from Boeing’s previous offer of 35%, and just shy of the 40% initially sought by the union. The deal also includes a $12,000 ratification bonus and a full 401(k) match, though it does not reinstate the pension plan eliminated a decade ago. Instead, vested employees in Boeing’s Employee Retirement Plan will receive a benefit multiplier of $105.
IAM leadership indicated that after extensive negotiations, further striking could risk a less favorable offer down the line.
“In every negotiation and strike, there is a point where we have extracted everything that we can… We are at that point now,” the IAM posted on social media.
The strike, which began on September 13, has been a costly setback for Boeing, reportedly losing the company nearly $10 billion due to delayed production and delivery disruptions. The work stoppage also compounded Boeing’s other challenges, including operational losses and recent issues with its commercial aircraft and space ventures. Last week, Boeing reported a $6.2 billion loss for the third quarter and announced plans to raise over $20 billion through a stock sale to stabilize its finances. Shares of Boeing rose 2.7% in after-hours trading following the announcement of the proposed contract deal.
Despite these financial setbacks, Boeing’s offer shows a commitment to rewarding its workforce and stabilizing production levels.
“We encourage all of our employees to learn more about the improved offer and vote on Monday,” Boeing said in a statement.
The company expects the new deal will support an annual average pay increase to $119,309 over the next four years.
The negotiations were facilitated with the assistance of Acting Secretary of Labor Julie Su, underscoring the importance of reaching a resolution. Boeing is also in the process of planned workforce adjustments, with around 17,000 layoffs expected to commence in November.
