Boeing (BA.US) workers to vote on new labor deal, ending strike threat

Boeing (BA.US) and the International Association of Machinists and Aerospace Workers (IAM) said Saturday that striking machinists will vote on a new contract proposal Wednesday that includes a 35% pay raise over four years, which could end a costly five-week strike. About 33,000 union workers in the West have been on strike since Sept. 13, halting production of Boeing's best-selling 737 MAX and 767 and 777 wide-body jets, putting more pressure on the company's already fragile finances. The latest proposal from the company includes a $7,000 ratification bonus, the reinstatement of incentive programs and increased contributions to workers' 401(k) retirement plans, including a one-time $5,000 contribution and up to 12% of employer contributions, according to the local IAM 751 union. Boeing said Saturday it was looking forward to "employees voting on the negotiated proposal." The union told workers Saturday that "the future of this contract is in your hands." Earlier, the U.S. Chamber of Commerce pleaded with both sides to reach an agreement to end the strike, which has spread throughout the industry, with major Boeing suppliers such as Spirit AeroSystems (SPR.US) announcing temporary layoffs. Boeing withdrew an improved proposal on Oct. 8 after talks mediated by a federal mediator broke down. The company had offered a 30% pay raise over four years, while the union was seeking a 40% raise and the reinstatement of a defined-benefit pension plan, which was not included in the new contract. Two senior union officials in Seattle said they believed members would vote in favor of the agreement, though they expected older workers who had been seeking the reinstatement of a defined-benefit pension plan to strongly oppose it. Economists estimate the strike and rotating furloughs of striking and non-striking workers, as well as temporary layoffs at Boeing suppliers, have reduced the number of nonfarm jobs added this month by as many as 50,000. The U.S. added 254,000 jobs in September, and the unemployment rate fell to 4.1% from 4.2% in August. As of writing, Boeing was up more than 3% before the market opened. The stock has fallen 40% this year.