Boeing strikes tentative labor deal with union representing over 32K workers

Boeing announced Sunday it reached a tentative agreement with the union representing about 33,000 workers in the Pacific Northwest, just days ahead of a possible strike scheduled later this week.

If the deal is approved, the proposed four-year contract would provide employees with a general wage increase of 25%, along with a commitment to build the next commercial airplane in the Seattle region.

The agreement is the first full labor deal reached between the two entities in 16 years. While providing an increase in wages, the deal would provide better retirement benefits and give the union greater input in the safety and quality of Boeing’s production system.

"We've heard what’s important to you for the new contract. And we have reached a tentative agreement with the union on a historic offer that takes care of you and your family," Boeing Commercial Airplanes President and CEO Stephanie Pope said in a video message to employees. "The contract offer provides the largest-ever general wage increase, lower medical cost share to make healthcare more affordable, greater company contributions toward your retirement, and improvements for a better work-life balance."

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Pope also said the contract will deepen the company’s commitment to the Pacific Northwest, where Boeing planted its roots.

From Washington, the company’s generations of workers have built airplanes that connect the world, Pope explained, which is why she and her team are excited about a piece in the contract guaranteeing facilities in the Puget Sound region will build the company’s next airplane.

"This would go along with our other flagship models, meaning job security for generations to come," she said. "It’s a commitment to you and to our community."

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The International Association of Machinists and Aerospace Workers (IAM) called the agreement the best contract it had ever negotiated and described union workers as committed to building quality airplanes.

While an agreement has been reached between negotiators, it still needs to be approved on Thursday by Boeing factory workers near Seattle and Portland, Oregon, who are represented by IAM.

The deal can still be rejected if the majority of workers fail to support the contract.

In fact, a strike could happen as early as Friday if two-thirds support a work stoppage in a second vote.

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But, if the deal is ratified Thursday, it would commit Boeing to building the 737’s replacement at Boeing’s facilities in the Pacific Northwest.

In mid-July, the union's members approved a strike authorization vote with 99.9% in favor. Strike authorization votes are common during bargaining between unions and companies and don't necessarily mean that a strike will occur.

IAM did not immediately respond to FOX Business’s request for comment.

The threat of a strike comes as Boeing has faced a particularly challenging year in the wake of the midair blowout of the door panel on a 737 Max 9 aircraft in January, which triggered a cabin decompression and prompted the airliner to turn back to Portland, for an emergency landing.

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The aftermath of that incident has prompted delays and pauses to its production line to address quality control problems while Boeing, the Federal Aviation Administration and National Transportation Safety Board investigated the issues. Boeing also saw CEO Dave Calhoun step down from the role amid the controversy and be replaced by new CEO Kelly Ortberg.

FOX Business’ Eric Revell and Reuters contributed to this report.