Boeing's shares rose early Monday after it reached a new tentative labor deal with the International Association of Machinists and Aerospace Workers union to end a strike that has been plaguing the plane maker for over a month. The latest proposal to the union's districts 751 and W24 includes a 35% general wage increase over the four-year length of the contract, up from the 25% hike proposed in the original offer in September, the company and the union said in separate statements on Saturday.
The deal also includes improved terms to employees' ratification bonuses, enhanced contributions by Boeing to retirement plans and reinstated incentive plans, among other benefits. The IAM, which represents more than 33,000 of Boeing's employees, said its members will vote on the new deal on Wednesday and the potential date on when they will return to work if the agreement is approved.
"This proposal will be carefully reviewed and voted upon by the frontline workers of Boeing," IAM District 751 President Jon Holden and IAM District W24 President Brandon Bryant said in a joint statement. "The workers will ultimately decide if this specific proposal is sufficient in meeting their very legitimate needs and goal of achieving respect and fairness at Boeing." "We look forward to our employees voting on the negotiated proposal," Boeing said in a separate statement.
The company's stock gained 3.8% in premarket activity. Boeing's workers have been on strike since Sept. 13 after an overwhelming majority rejected the initial labor deal agreed between the jet manufacturer and the union. Earlier this month, Boeing confirmed that it withdrew its latest pay offer, which reportedly included a 30% increase in wages, to the striking union following a breakdown in negotiations.
Last week, Chief Executive Kelly Ortberg announced that the company plans to reduce its total workforce by roughly 10% over the coming months, to align its staffing levels with its "financial reality." Boeing filed a registration statement last week to sell a combination of securities totaling up to $25 billion through one or more offerings and entered into a $10 billion supplemental credit agreement with a syndicate of lenders.
The plane maker, which is scheduled to release its third-quarter results on Wednesday, said last week it expects to report a per-share loss of $9.97 for the period on revenue of $17.8 billion, amid pre-tax charges for certain programs across its commercial airplanes and defense, space and security segments and the workers strike.
The current consensus on Capital IQ is for a GAAP loss of $7.48 a share and revenue of $17.98 billion..