Boeing strike: union reaches new deal on wage hike, 401k

The proposal includes a wage increase of 35% spread over four years, a reinstated incentive plan and an increase to company 401(k) matching, the International Association of Machinists and Aerospace Workers district representing the workers said in a statement on its website Saturday. A ratification vote is set for Oct. 23.

The union cited the assistance of US Labor Secretary Julie Su, who went to Seattle this week to help the parties engage in indirect talks. The Labor Department has said Su has met with the union and new Boeing Chief Executive Officer Kelly Ortberg, and has been in touch with both sides multiple times. 

Pressure is mounting for Boeing, its suppliers and striking workers as the strike enters a sixth week. The work stoppage that began Sept. 13 stretches along the West Coast and has forced Boeing to shut down assembly lines for its cash-cow 737 Max, 767 and 777 aircraft.

The planemaker is moving forward with plans to cut 10% of its workforce, the first step toward a broader realignment of its businesses under Ortberg. The pain has also started to ripple through Boeing’s supply chain, with Spirit AeroSystems Holdings Inc. warning it would have to lay off 700 workers building components for the 767 and 777 programs.

Boeing has taken the initial steps to raise capital it will need to shore up its operations and maintain its investment-grade credit rating. The company has lined up a $10 billion credit facility with banks, and filed a shelf registration to raise as much as $25 billion over the next three years.

The strike by IAM District 751 marks the first major labor strife at Boeing in 16 years. While hourly workers are pushing for large pay increases and better retirement benefits, they’re driven by resentment over receiving paltry wage increases over the past decade while senior executives were richly rewarded.