Boeing ($BA) shares experienced an early Tuesday uptick as factory workers ratified the latest labor deal with their union, effectively ending a strike that had troubled the company for nearly two months. Members of the International Association of Machinists and Aerospace Workers union's districts 751 and W24 voted late Monday to approve the new contract, which incorporates a striking 38% general wage increase over a four-year duration—translating to roughly a 44% increase on a compound basis.
The IAM represents approximately 33,000 employees at Boeing. Boeing's Chief Executive Kelly Ortberg expressed satisfaction over the agreement, stating, "We were pleased to reach a ratified agreement with IAM 751 and W24. There is much work ahead to return to the excellence that made Boeing an iconic company." In premarket activity, Boeing shares saw a 2% increase following the news.
The approved proposal also features a $12,000 ratification bonus, a special company contribution of 4% into retirement plans, and essential job security provisions, among various other benefits. Workers represented by the IAM are set to return to their positions on Wednesday, with a requirement to resume work by Nov.
12. "Through this victory and the strike that made it possible, IAM members have taken a stand for respect and fair wages in the workplace," asserted Jon Holden, IAM District 751 President, alongside Brandon Bryant, IAM District W24 President, in a concurrent joint statement. "Our members perform high-quality and flight-critical work for the airplanes we build and deserve a return on their labor investment that provides for a quality of life worthy of that labor." Boeing's workforce began striking on Sept.
13 after initially rejecting a labor deal negotiated between the company and the union. Last month, IAM members cast a 64% vote against another proposal presented by Boeing, which aimed to increase wages by 35%. In October, Boeing revealed a wider-than-expected loss for the third quarter and announced intentions to lay off approximately 10% of its workforce in the forthcoming months.
The previous week, the company also disclosed an offering of 90 million common shares and $5 billion of depositary shares to raise capital. Price: 158.20, Change: +3.13, Percent Change: +2.02.