U.S. News

Boeing, Union Reach New Deal on Contract Extension

After six weeks of discreet negotiations, Boeing and the International Association of Machinists and Aerospace Workers (IAM) have reached an agreement on a 4-year contract extension.

Getty Images

The deal, if approved by IAM workers, would guarantee Boeing will not have work stoppages for the next five years. It also could lead to an end of the lawsuit brought by the National Labor Relations Board to force Boeing into moving a 787 assembly plant from South Carolina back to Washington.

Boeing has more than 28,000 Machinists members. They will start voting on the proposed contract next week. The new deal includes:

  • Boeing's guarantee it will build its newest plane, the 737MAX, in the Seattle area.
  • a 2 percent wage increase per year
  • a $5,000 signing bonus
  • its firm commitment to keep building widebody planes in the Seattle area

The new labor deal would be huge for Boeing as it ramps up production for all of its models. The company has announced plans to increase the number of planes it builds each month, and having labor peace will be critical in making sure the production ramp ups take place without any major problems.

If the proposed contract is approved, IAM leaders said they will go to the National Labor Relations Board and say that they no longer have any grievances with Boeing about its new 787 Dreamliner plant in Charleston, South Carolina.

While the union's dropping its complaints against Boeing would not force the the NLRB to drop or settle its suit against the plane maker, it is believed the NLRB would work out an end to the case.

Lafe Solomon, acting general counsel, reacted to the Boeing contract and said, "The tentative agreement announced today between Boeing and the Machinists Union is a very significant and hopeful development. The tentative agreement is subject to ratification by the employees, and, if ratified, we will be in discussions with the parties about the next steps in the process."

Related Tags