Boeing reaches a tentative agreement with IAM, securing a 25% wage hike and plans to build future jets in the Pacific Northwest. A strike could be avoided if the deal is approved.
Bollywood Fever: Boeing announced on Sunday that it has reached a tentative agreement with the International Association of Machinists and Aerospace Workers (IAM), which represents more than 32,000 workers in the U.S. Pacific Northwest. If ratified, the four-year contract would prevent a potential strike set for as early as September 13.
The proposed deal includes a general wage increase of 25%, enhanced retirement benefits, and a commitment to build Boeing’s next commercial airplane in the Seattle area, securing job security for generations.
This is a significant win for new Boeing CEO Kelly Ortberg, who took over last month with a mandate to improve the company’s quality standards.
The agreement marks the first full labor deal between Boeing and the union in 16 years. It gives the IAM greater input in Boeing’s production system, addressing safety and quality concerns.
Union leaders hailed the contract as the best they have ever negotiated, citing it as a testament to their workers’ commitment to building high-quality aircraft.
Boeing has been dealing with a quality crisis, facing scrutiny after incidents like a door plug blowing off a near-new MAX jetliner earlier this year.
The tentative deal would help stabilize Boeing as it faces financial pressures, including a second-quarter net loss of $1.44 billion.
The agreement would need to be approved by Boeing workers in the Seattle and Portland areas on Thursday.
If it passes, Boeing will also commit to building the 737 replacement at its Pacific Northwest facilities if the project begins within the contract’s term.
This would contrast with previous decisions that saw Boeing exploring production in other regions, a move that had frustrated the IAM.
In addition to labor peace, the deal would support Boeing’s efforts to raise production of the 737 MAX to 38 planes per month by the end of the year.
Wells Fargo recently projected that Boeing’s cash flow target of $10 billion may be delayed until 2027-28, and the company might need to raise $30 billion before developing a new aircraft.
While the union originally sought a 40% wage increase, they praised the 25% raise as part of the best contract in their history.
The deal comes amid a trend of labor gains in tight markets, following a similar 25% wage hike won by the United Auto Workers union last year.
The negotiations were closely watched by the Biden administration, with Acting Labor Secretary Julie Su urging both sides to reach a fair contract.
A final vote on the deal will take place on Thursday, determining whether Boeing can avert a strike and secure stability for the years ahead.
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