Boeing has agreed to a preliminary new contract with union leaders that includes a big wage increase that will avert a strike in the Seattle area, the two sides announced Sunday.
The deal, which must be ratified by workers, includes a 25 percent pay increase over the four-year term of the contract, according to Boeing and the International Union of Mechanical and Aerospace Workers (IAM) District 751, which represents more of 33,000 employees. .
Other key elements include lower health care costs for workers, reduced mandatory overtime, 12 weeks of paid parental leave and a commitment to build Boeing’s next new plane in Washington state’s Puget Sound region if the contract is ratified this week , according to a Boeing. newsletter.
The tentative deal comes just weeks after the arrival of Boeing’s new chief executive, Kelly Ortberg, who has been tasked with turning around the iconic plane maker after its reputation was tarnished by a series of aviation safety problems and other setbacks.
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While Ortberg had pledged to “restore” relations with the union, the IAM had described the two sides as “far apart” on key points as recently as Friday.
In a message to official members, IAM district president Jon Holden said the union’s “strength, solidarity and unity” had produced “the best contract we’ve ever had.”
He urged members to consider the proposal carefully, saying, “We believe this proposal will benefit all of our members and our future.”
If workers ratify the contract, Boeing will follow in the footsteps of United Parcel Service, which narrowly averted a strike in July 2023 after reaching a deal with the Teamsters union.
By contrast, Detroit automakers General Motors, Ford and Stellantis experienced a six-week partial strike last fall before reaching an agreement with the United Auto Workers that included a 25 percent wage increase.
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Commitment to the Seattle area
Boeing Commercial Airplanes President Stephanie Pope described the wage increase as the “largest across-the-board wage increase ever,” in a video message to employees, Boeing said.
“Equally important, this contract deepens our commitment to the Pacific Northwest,” the Pope said, adding that the promise of a new plane means “job security for generations to come.”
Boeing is under heavy scrutiny. In January, a fuselage panel exploded from an Alaska Airlines Boeing 737 MAX plane mid-flight, necessitating an emergency landing.
That revived questions about safety and quality control after the company had seemingly made progress following fatal MAX crashes in 2018 and 2019.
The aerospace giant in March announced a management shakeup that included the departure of Dave Calhoun as CEO. Ortberg took the helm on August 8.
However, workers have complained of retaliation after raising safety concerns.
Those issues were highlighted at a Senate hearing in April and a National Transportation Safety Board hearing in August on the Alaska Airlines incident, with IAM representatives describing the company’s safety and training programs as inadequate.
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Analysts widely praised the hiring of Ortberg, a Boeing outsider with extensive engineering and aerospace experience at electronics supplier Rockwell Collins.
But Ortberg faces significant challenges at Boeing, which slowed production of commercial planes after the Alaska Airlines incident and announced the acquisition of supplier Spirit AeroSystems as part of an effort to improve quality control.
On Sept. 3, Wells Fargo downgraded Boeing and cut its stock price target in a note that described the company’s near-term earnings outlook as questionable.
Wells Fargo highlighted the need for Boeing to launch a new plane in 2027 to compete with Airbus, reducing its medium-term free cash flow outlook even as the company moves away from recent problems and ramps up plane production.
Source: AFP