Boeing Co has made an early deal with its biggest union for a new four-year contract, which if ratified would mean the end of the planemaker's dispute with the National Labor Relations Board and ensure the new 737 MAX single-aisle plane would be built in Washington state.
The agreement, coming nine months before the expiration of the current contract, would give Boeing some comfort that strikes will not disrupt its operations as it ramps up production of many of its models, and it would give the union the local jobs for which it has campaigned.
The 28,000 members of the International Association of Machinists & Aerospace Workers will vote on the contract deal next week.
If ratified, the union said it would drop its grievances against the company over its establishment of a new 787 production site in South Carolina, which is the subject of a dispute between Boeing and the NLRB, which has taken on wider political significance.
We think this is a significant and hopeful development, said NLRB spokeswoman Nancy Cleeland, adding that NLRB was not a party to the contract talks and has not yet received any official word from Boeing or the union.
This is huge, said Scott Hamilton, aviation industry consultant at Leeham Co. For IAM 751 and Boeing to reach a labor agreement before contract negotiations even truly commence is pretty much unprecedented. The fact that it would settle the NLRB case is huge for all the parties involved.
Boeing and the IAM have a rocky history with four strikes in the last 22 years, most recently a 58-day stoppage in 2008 which further delayed the already-late 787. The company has lost more than 200 production days to strikes over the past two decades.
Boeing shares were up 4.7 percent to $68.31 in a generally higher market.
(Additional reporting by Karen Jacobs in New York and Kyle Peterson in Chicago; Editing by Gerald E. McCormick and Tim Dobbyn)