The aviation giant and a local labor union have agreed to the deal after workers threatened a crippling strike. The company has suffered major financial losses following a series of fatal crashes involving its 737 MAX.
Boeing has reached a tentative deal with workers to avoid a major strike, the aircraft maker said late on Sunday. The company conceded a 25% wage increase and a promise to build its next commercial airplane at its Seattle area plants.
The deal with International Association of Machinists and Aerospace Workers (IAM), which represents some 32,000 Boeing employees, is the first of its kind in 16 years. It also includes a provision for improving retirement benefits and gives the union more power in reviewing safety and quality procedures.
“Although there was no way to achieve success on every single item, we can honestly say that this proposal is the best contract we’ve negotiated in our history,” the local IAM branch said. They had initially been seeking a 40% wage increase.
Stephanie Pope, the CEO of Boeing’s commercial aircraft branch, said the deal promised “job security for generations to come.”
Workers had vowed to launch a crippling strike on September 13 if their demands were not met. A work stoppage is still possible if more than two thirds of employees are dissatisfied with the deal.
Successive scandals
The contract, which still needs to be ratified by union members on Thursday, comes on the heels of the worst years in Boeing’s company history.
In 2019, the company’s 737 MAX aircraft were grounded by US authorities following a fatal crash in Indonesia and a second in Ethiopia. It then came to light that some of the Boeing leadership and the Federal Aviation Administration (FAA) had colluded to cover up faulty software.
An investigation also found that the FAA had punished whistleblowers trying to raise the alarm about safety concerns.
Boeing has had to pay $20 billion in fines, and lost a further $60 billion in canceled orders for the 737 MAX. The company then had to pay $2.5 billion to settle the government’s fraud case against it.
Following the aircraft’s recertification, in January of this year a door blew off an Alaskan Airlines 737 MAX, causing an uncontrolled decompression of the aircraft.
In May, the FAA opened an investigation into claims that Boeing falsified records related to its 787 jet.
The scandals have caused major financial issues for the company. In July, Boeing posted a second quarter loss of $1.44 billion.
In recent weeks, Boeing has been in the headlines again followingissues with its Starliner spacecraft. Astronauts it had been carrying to the International Space Station were expecting an eight-day journey, but due to technical issues with the Starliner, are now set to be stranded in space for months.
