Boeing And its largest union said Sunday it had reached a tentative agreement on a new contract that, if ratified, would avert a strike that threatens to shut down aircraft production by the end of next week.
Boeing said the 33,000 workers represented by the International Association of Machinists and Aerospace Workers will receive a 25% pay increase in the four-year contract, with an average wage increase of 33% due to an increase in seniority steps. That is less than the 40% sought by the union during negotiations.
But the company agreed to a major union demand to build its next plane in Washington state, presumably by union members.
Workers will receive a $3,000 lump-sum payment and a reduced share of health care costs, Boeing said.
“Negotiations are a give and take, and although there was no way to achieve success on every single item, we can honestly say that this proposal is the best contract we’ve negotiated in our history,” said John Holden, president of IAM District 751, Boeing. machinist union outpost at, said a statement posted on the union’s website.
The union’s bargaining committee is recommending that members ratify the agreement, Holden said.
Stephanie Pope, president of Boeing’s commercial airplane division, said in a video for employees on Sunday that the proposed agreement includes the company’s largest general wage increase ever. She said Boeing’s promise to build the next new airliner in the Puget Sound area means job security for generations to come.
The proposed agreement is contingent on union members ratifying it by late Thursday night Pacific time, after which the union was threatening to strike.
The union has scheduled a two-part election for Thursday, in which workers will vote whether to accept the contract, and whether to authorize a strike if they reject the offer. About half a dozen locations in Washington state and one location in California will vote.
A strike would have been added Boeing has to faceWhich is headed for its sixth consecutive money-losing year and has just been hired The new CEO To turn things around.
The new chief executive, Kelly Ortberg, will try to reverse the $27 billion loss starting in 2019. His assignment included fixing problems in Boeing’s aircraft-manufacturing process, securing regulatory approval for the long-delayed 777X jumbo jet, limiting losses. -Budget government contracts, pay down $45 billion in net debt, and absorb Spirit Aerosystems, Boeing’s only money-losing major supplier. Bought for $4.7 billion.
Ortberg has given a conciliatory voice to the machinist union.
“He understands that he has a fundamentally contentious relationship with the union, and he wants to make that relationship better,” said TD Cowen aerospace analyst Kai von Rumohr.
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