Boeing Reaches Tentative Deal With Machinists Union To End Strike

Boeing (BA) shares are rising in premarket trading Friday after it reached a tentative deal with its machinists union on a new contract, potentially ending a crippling seven-week strike.

The International Association of Machinists (IAM) is asking its members to approve the sweetened offer from Boeing in a vote on Monday. Their members have been on strike on Sept. 13.

“In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor,” IAM District 751 said Thursday. “We are at that point now and risk a regressive or lesser offer in the future.”

Boeing’s New Offer Includes 38% Pay Hike Over Four Years

The new offer includes a 38% general wage increase over four years, higher than the previous offer of 35%. That “compounds to 43.65% over the life of the agreement,” the union said.

The new offer will also give workers the option of a $12,000 one-time ratification bonus; 401(k) contribution; or “a combination of both,” the union said.

“We encourage all of our employees to learn more about the improved offer and vote on Monday, Nov. 4,” Boeing said.

Boeing Has Taken Steps To Stem Cash Drain From Strike

The strike has been painful for Boeing, which is raising billions of dollars to stem a cash drain. Chief Executive Officer (CEO) Kelly Ortberg, who stepped into the role in August, said in a memo to employees earlier this month that the plane maker plans to lay off about 10% of its workforce, or 17,000 workers, “over the coming months” and is postponing the launch of its first 777x jetliner.

Boeing shares, which are up 2% in premarket trading, have lost more than 40% of their value this year through Thursday’s close.