Boeing and its largest union have reached an agreement on a new contract that would prevent a strike threatening to halt aircraft production by the end of the week. The contract includes pay raises of 25% over four years for 33,000 workers, with average wages increasing by 33% due to seniority step raises. Although less than the 40% demanded by the union, the proposal also includes building the next plane in Washington state and $3,000 lump sum payments and reduced health care costs for workers.
The union’s bargaining committee is recommending members ratify the contract. Boeing’s commercial airplanes division president Stephanie Pope stated that the proposed contract offers the largest general wage increase ever and promises job security by building the next airliner in the Puget Sound area.
The contract is contingent on union ratification by late Thursday Pacific time. The union has scheduled an election for Thursday to vote on accepting the contract and authorizing a strike if rejected. A strike would further complicate Boeing’s financial struggles and challenges, as the company recently hired a new CEO, Kelly Ortberg, to address the $27 billion in losses since 2019. Ortberg faces the task of fixing manufacturing issues, gaining regulatory approval for the 777X jumbo jet, managing government contracts, reducing debt, and integrating Spirit AeroSystems, a supplier acquired for $4.7 billion.
Ortberg has shown willingness to improve relations with the union, recognizing the historically contentious nature of their interactions. Analysts believe he aims to strengthen these relationships for the benefit of both parties.