Boeing has struck a tentative deal with its striking members of its defense union, according to a Wednesday announcement shortly before the market close. The agreement is subject to a final vote on Friday. Boeing stock fell on Thursday.
The IAM Union on Wednesday announced that its District 837 negotiating committee reached a tentative labor agreement with Boeing Defense. The deal includes improvements to general wage increases and restores a signing bonus, the IAM said in a post online.
Boeing's new offer includes 45% wage growth over the course of the five-year contract. That's up from its previous July offer for an average 40% wage growth over four years. The deal includes a $4,000 lump sum ratification bonus, down from the $5,000 lump sum bonus in July.
The new deal did not include any changes to Boeing's July proposals on pay progression, retirement, healthcare, vacation and sick leave.
Overall, the tentative agreement increases the average wage to $109,000 from $75,000, according to Boeing.
Voting will begin on Friday, between 8 a.m. and 11 a.m. CT.
The roughly 3,200 IAM District 837 members have been striking since Aug. 4. The union represents workers at Boeing's St. Louis facilities that support defense operations, which includes assembling the F-15, F/A-18, as well as advanced missiles and defense technologies.
Strike Developments
The two parties temporarily iced talks back around Labor Day after failing to reach a deal. Negotiations began back in late July regarding wages and benefits. The strike had marked Boeing's first defense sector union strike since 1996.
Boeing in November agreed to a new contract and ended a seven-week strike for separate districts of its machinist union. That deal included a 38% general wage increase over four years, which compounds to 43.65% over the lifetime of the agreement. The workers secured a $12,000 ratification bonus, which was up from $7,000 in a prior offer.
The deal also increased Boeing's 401(k) contribution to its union members' retirement plans, reinstated an incentive plan, and improved its disability plans and overtime rules, among other benefits.
Boeing Stock
BA stock fell 3.3% Thursday, dropping further below its 50-day moving average. Shares on Wednesday declined slightly to drop below the technical line.
Boeing is trading in a flat base with a 242.69 buy point.
Boeing stock has rallied more than 24% this year, making it the fourth-best performer in the Dow Jones Industrial Average. The aerospace and defense manufacturer trails only JPMorgan Chase, Nvidia and Goldman Sachs.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
