Investing.com -- Shares of Boeing Co (NYSE:BA) rose 4.6% in pre-open trade on Monday following the announcement of a tentative agreement between the aerospace giant and the International Association of Machinists (IAM) Districts 751 & W24.
The contract offer, which is set to benefit more than 33,000 Boeing employees, promises the largest-ever general wage increase, reduced healthcare costs, and improved retirement contributions, addressing key employee concerns.
A major highlight of the deal is Boeing’s decision to manufacture its next new airplane model in the Puget Sound region, home to much of its workforce.
“The contract offer provides the largest-ever general wage increase, lower medical cost share to make healthcare more affordable, greater company contributions toward your retirement, and improvements for a better work-life balance,” said Boeing’s chief executive, Stephanie Pope.
This move is seen as a long-term commitment to the region and to the workers who have historically played a crucial role in building Boeing’s commercial airplanes.
The tentative agreement marks the first full negotiation between Boeing and IAM Districts 751 & W24 in 16 years. Since the last full contract was ratified in 2008, employees have approved two extensions, with the current eight-year extension set to expire in 2024.
The new contract, once ratified, would likely bring stability to Boeing’s labor relations for years to come.
“While unlikely, if IAM strikes, we think it's realistic to assume the strike's duration would be in line with the 51 days of the last four walk-outs. That's because it would extend to two weeks before Thanksgiving with workers' $150/week strike fund pay running low going into the holidays,” said analysts at TD Cowen in a note.