Boeing Co. announced Sunday that it had reached a tentative agreement with unions representing about 33,000 workers in the Pacific Northwest, days before a strike scheduled for later this week.
If the deal is approved, the proposed four-year contract would provide a 25 percent pay increase for employees and commit to building the company’s next generation of commercial aircraft in the Seattle area.
The agreement marks the first full collective bargaining agreement between the two companies in 16 years, and it promises higher wages, enhanced retirement benefits and gives the union more of a say over the safety and quality of Boeing’s production system.
“We heard what’s important to you in a new contract, and we’ve reached a tentative agreement with our union on a historic proposal that takes care of you and your families,” Boeing Commercial Airplanes president and CEO Stephanie Pope said in a video message to employees. “The contract proposal provides the largest prevailing wage increases in history, reduced health care costs with reduced healthcare costs, increased company contributions to retirement benefits and improved work-life balance.”
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Pope also said the deal deepens Boeing’s commitment to the Pacific Northwest, where the company is based.
Pope explained that generations of the company’s employees have been building the planes that connect the world from Washington, which is why she and her team are excited about the part of the contract that ensures the company’s next plane will be built at a facility in the Puget Sound region.
“This works in conjunction with our other flagship models to provide job security for future generations,” she said. “This is a promise to you and to our community.”
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The International Union of Machinists and Aerospace Workers (IAM) called the agreement the best contract ever negotiated and said its members were committed to building high-quality aircraft.
The agreement was reached between negotiators but still needs to be approved Thursday by Boeing factory workers in Seattle and near Portland, Oregon, who are represented by the IAM.
If a majority of workers do not support the contract, it can be rejected.
In fact, if two-thirds of voters support a strike in the second vote, it could happen as early as Friday.
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But if the agreement is ratified on Thursday, Boeing will build the 737’s replacement at a Boeing facility in the Pacific Northwest.
In mid-July, union members approved a strike authorization vote with a 99.9% vote in favor. A strike authorization vote is common in negotiations between a union and a company and does not necessarily mean that a strike will take place.
IAM did not immediately respond to FOX Business’ request for comment.
The strike threat comes as Boeing faces a particularly difficult year after a door panel on a 737 MAX 9 jet burst in mid-air in January, causing the cabin to depressurize and forcing the plane to return to Portland for an emergency landing.
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The accident led to delays and shutdowns of production lines to address quality control issues while Boeing, the Federal Aviation Administration and the National Transportation Safety Board investigated the problem. Boeing CEO Dave Calhoun resigned amid the controversy and was replaced by Kelly Ortberg.
FOX Business’ Eric Revell and Reuters contributed to this report.