Boeing Reaches Tentative Union Deal—Would End Five-Week Strike

Topline

Boeing reached a tentative agreement with its striking union workers Saturday, according to multiple outlets, potentially ending a five-week-long strike that halted production of the company’s key aircraft, threatened large layoffs and heightened its financial struggles.

Key Facts

The tentative deal includes a 35% wage increase over four years for workers, according to The Wall Street Journal, up from its initial offer of 25%.

The deal still requires approval from most of the International Association of Machinists’ members, as the union’s vote is scheduled for Wednesday.

The deal also includes increases to 401k contributions and a $7,000 ratification bonus, according to the latest proposal.

Boeing has lost an estimated $1 billion a month over the strike, according to a Standard & Poor’s estimate cited by CNN, which noted the company’s recent announcement it would lay off about 10% of its workforce.

Boeing did not immediately respond to Forbes’ request for comment.

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Big Number

95%. That is how many unionized Boeing workers rejected the previous tentative deal that was also recommended by union leaders, the Journal reported.

What We Don’t Know

If an approved deal would reverse or lessen Boeing’s plan to cut about 17,000 employees including executives, managers and employees. The company recently said it would reduce its workforce “over the coming months,” making the announcement as it suffered from production delays caused by the strike.

Key Background

The production-halting strike against Boeing is the latest obstacle faced by the aerospace company. The company came under scrutiny early this year after one of its airplanes experienced a door blowout during an Alaska Airlines flight, which led to a ban on production increases of one of its best-selling aircraft, management and board changes and a DOJ investigation. Boeing’s aircraft deliveries slid from 40 in August, to 33 in September as the strike stopped production on Boeing's 777 and 767 airplanes, the former of which is one of the company’s most profitable aircraft. Boeing shares are down more than 40% this year, trading at $155 after opening January at $251.76. It also expects to report a loss of $9.97 a share, according to preliminary third quarter results. The drop would follow a loss of $1.4 billion posted during its second quarter.

Further Reading

Boeing Will Cut About 10% Of Its Workforce Amid Strike And Financial Struggles (Forbes)