Boeing, Union Agree on New Contract

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Facts

  • Boeing and its largest union, the International Association of Machinists and Aerospace Workers, Sunday announced they've agreed on a new contract — averting a strike if it's ratified.[1]
  • The new agreement calls for the 33K union workers to get pay raises of 25% over four years. Average wages will rise 33% because of seniority step increases, but the union had been seeking a 40% rise.[1]
  • As a tradeoff, Boeing has agreed to build its next airplane in the US Pacific Northwest region.[2]
  • The first full labor deal in 16 years — and the first since Chief Executive Officer Kelly Ortberg took over Boeing in August — also includes improved retirement benefits and means for the union to weigh in more on the safety and quality of the production system.[3]
  • This comes after Ortberg was named chief executive amid Boeing's steep financial losses and damaged safety reputation related to several high-profile in-flight incidents and two fatal accidents over the past five years.[4]

Sources: [1]Associated Press, [2]CNBC, [3]USA Today and [4]BBC News.

Narratives

  • Narrative A, as provided by Business Insider. This deal shows that Ortberg is well-positioned for this role. Bathed in a sea of bad publicity and sinking value, Ortberg didn't just cut a deal that shows the company values its employees and meets the union halfway — and gives union leaders a contract to be proud of — but also commits to building in the Pacific Northwest, where there's the best chance for Boeing to complete its projects correctly. Boeing is on the path to recovery.
  • Narrative B, as provided by CNN. The union had all the leverage here, considering the dire straits Boeing has found itself in. However, the union negotiated a fair deal and made some concessions. So the onus is now on the company to fulfill its promises and commit to the safety improvements it has been talking about since Ortberg ascended to the chief executive role. Boeing's future actions, not rhetoric, will determine whether the company survives.

Predictions