Boeing Co saw its shares climb 1.92% in pre-market trading on Tuesday following the acceptance of a new contract by striking workers. The strike, noted as the most costly in the U.S. in over a quarter-century, concluded with 59% of the International Association of Machinists (IAM) members voting in favor of the deal.
What Happened: Previously, IAM members had rejected Boeing's initial offer unanimously and the second offer by 64%, prolonging the strike.
Boeing expressed satisfaction with the agreement. CEO Kelly Ortberg stated, "While the past few months have been difficult for all of us, we are all part of the same team."
The 33,000 union members will resume work on Wednesday.
The new contract includes an immediate 13% raise, followed by 9% raises for the next two years, and a 7% increase in the fourth year, totaling over 43%. Workers will also receive a $12,000 ratification bonus, but the deal did not reinstate the traditional pension plan lost in 2014, a key issue for many members.
Why It Matters: The conclusion of this nearly two-month strike marks a significant moment for Boeing Co and its workforce. The new contract, which was supported by the Biden administration and facilitated by Acting U.S. Secretary of Labor Julie Su, introduces substantial benefits for the workers. Over the four-year period, employees will see a compounded wage increase of 43.65%, alongside enhanced retirement contributions and improved health benefits. This agreement not only brings an end to the costly strike but also represents a major win for the workers, who have secured significant pay increases and bonuses.
The strike had affected Boeing's operations across Washington, Oregon, and California, highlighting the critical role of the IAM in negotiating labor terms. The resolution of this strike is expected to stabilize Boeing's production capabilities and restore normalcy to its operations, which is crucial for the company's future performance and stock value.
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