Boeing reaches preliminary agreement with machinists union

Skift Take

Even if the union ratifies the new contract, Boeing will still have to deal with many problems in its aircraft programs that have led to delays and slow production.

Meghna Maharishi

The Boeing machinists union announced Saturday it had reached a tentative agreement with the company, ending a month-long strike that had halted production.

In the latest proposal, the aircraft maker is offering a 35% increase over four years. The union plans to vote on the new agreement on October 23. Boeing is also retaining annual bonuses that were removed from the original offer. Under the new contract, employees will also receive $7,000 ratification bonuses.

However, the new proposal does not restore pensions, which has been a key demand of many union members.

The head of the International Association of Boeing Machinists and Aerospace Workers said Saturday that the agreement was reached with the help of acting Labor Secretary Julie Su, who met with both sides earlier this week.

“We have received an agreed motion and resolution to end the strike, and it deserves to be presented to the membership and deserves your consideration,” IAM District 751 said Saturday.

Boeing still faces problems with its aviation programs

It was previously estimated that Boeing was losing up to $1 billion a month due to the strike. The company announced Tuesday it would sell up to $25 billion in stock or debt to bolster its liquidity. It also entered into a $10 billion loan agreement with a consortium of banks.

Just weeks earlier, Boeing CEO Kelly Ortberg told employees that the company would have to delay the launch of the 777X and lay off 10% of its workforce, resulting in a workforce of 17,000.

Even if the union ratifies the new contract, Boeing will still face many challenges to its aircraft programs. Ortberg said first deliveries of the 777X will be delayed due to development issues. Boeing discovered structural flaws in the 777X in August and was forced to suspend flight testing, according to Reuters.

Boeing is set to report third-quarter earnings on October 23.