Boeing has reached a preliminary agreement with a union representing around 33,000 employees, which will see wages increase by a significant 25% over the course of four years. This move will avert the major strike scheduled to begin on September 13.
Former Boeing CEO Dave Calhoun had indicated in July to investors that the company would make every effort to avoid a strike.
The four-year agreement between Boeing and the International Association of Machinists and Aerospace Workers (IAM) is seen as unprecedented, including a substantial 25% overall wage increase for all employees, reduction in healthcare costs for workers, ensuring 12 weeks of paid parental leave, enhancing job security, and increasing funding for Boeing’s employee retirement plans.
Before taking effect, the agreement still needs approval from Boeing factory workers represented by IAM on Thursday, September 12. Union leadership welcomed the preliminary agreement, stating that it achieves the union’s goals.
“After 16 years, we finally returned to the negotiating table to fight for your rightful benefits and negotiate on all agreements. During this time, the world has changed, and so have we. You entrusted us to steadfastly support your priorities, and we are proud to have done so,” IAM said in a statement to its members.
This marks the first entirely new agreement reached by both parties since 2008.
The union originally sought a 40% wage increase in this comprehensive negotiation. While the agreement reached with Boeing entails a 25% pay raise, the union achieved other favorable outcomes.
“Negotiation is about compromise. Although we may not succeed on every front, we can honestly say that this proposal is the best contract we have ever negotiated,” IAM stated.
This is Boeing’s largest pay raise offer to union members. According to the new agreement reached by both sides, Boeing has also committed to building the next new aircraft in the state of Washington, ensuring employment there.
Boeing confirmed in a statement that a preliminary agreement on a “historic proposal” had been reached with IAM. Stephanie Pope, President and CEO of Boeing Commercial Airplanes, said in a video message to employees, “This contract provides the largest overall wage increase ever, reduces the medical cost-sharing ratio, making healthcare more affordable for workers, increases the company’s contributions to retirement, and improves work-life balance.”
“Equally important, this contract deepens our commitment to the Pacific Northwest region. Boeing is rooted in Washington. Generations of workers here have manufactured incredible aircraft that connect the world. That is why we are excited to announce that as part of the contract, our team in the Puget Sound area will be producing Boeing’s next new aircraft. Alongside our other flagship models, this signifies job security for future generations. This is a significant commitment to you and our community.”