Boeing Co. (BA) saw its shares rise in pre-market trading after reaching a tentative agreement with its workers’ union, potentially preventing a strike that could have severely impacted operations. The deal, reached after weeks of negotiations, covers over 32,000 employees in the U.S. Pacific Northwest.
The agreement includes a substantial 25% wage increase over the next four years, demonstrating Boeing’s commitment to its employees. Furthermore, the deal includes a promise to build the next generation of commercial airplanes at the company’s facilities in the Seattle area. This commitment signifies a crucial step in solidifying the company’s presence in the region and reinforces its commitment to local employment.
This agreement arrives at a critical juncture for Boeing, as the company seeks to rebound from the financial and reputational damage caused by the grounding of its 737 MAX jets. The successful negotiation and potential ratification of the agreement represent a significant victory for new Boeing CEO Kelly Ortberg, who took over the company in 2023.
The tentative agreement, marking the first comprehensive labor deal in 16 years, is now pending approval by Boeing factory workers near Seattle and Portland, Oregon. The workers will vote on the deal on Thursday, and if it fails to secure a majority, it could be rejected. This could potentially lead to a strike if two-thirds of the workers support a work stoppage in a second vote.
If ratified, the agreement would solidify Boeing’s commitment to its Pacific Northwest facilities. The deal includes a provision that mandates Boeing to build the replacement for the 737 at its facilities in the region if the project commences during the contract’s lifespan. However, the timeline for the announcement of Boeing’s next commercial aircraft remains unclear.
The agreement signifies a potential turning point for Boeing, allowing the company to focus on its recovery while also securing the future of its workforce. A successful ratification would demonstrate Boeing’s commitment to its employees and its continued investment in the Pacific Northwest region.
