The Boeing Company (NYSE:BA) has reached a contract agreement with members of the International Association of Machinists and Aerospace Workers that moves workers from a traditional pension plan to enrollment in the company's 401k plan and offers eligible members a signing bonus and wage increases over the life of the contract, which expires in July 2022.

The pact, which covers more than 2,300 workers, means that employees will receive wage increases in 2016, 2018, 2020 and 2022, with lump-sum payments coming in 2017, 2019 and 2021, Chicago-based Boeing said Sunday. Additionally, about 30 days after the contract is ratified, workers will receive an $8,000 signing bonus. Workers also will be expected to contribute more to their health costs.

Boeing expects the "changes to the IAM 837 retirement benefit plan to have an immaterial impact to 2014 core (non-GAAP) earnings. The changes are expected to result in non-cash pension curtailment charges of approximately $80 million to first-quarter GAAP earnings." It also said the deal will help the company's competitive position and aid in winning new orders.

The St. Louis Post-Dispatch said the deal covers workers in St. Louis, at the Naval Air Station Patuxent River, Md., and China Lake, Calif.

Under the new deal the company will set up a two-tiered wage structure, the Post-Dispatch reported. It wrote that workers taken on after March 1 in many jobs will see their wages top out "at levels 8 percent to 49 percent below the top wages now earned by workers in the same classes."

Labor officials said the deal aligns the union's and the employer's interests. Machinists District 837 President Gordon King told the paper that, the wages were "not too far off from the traditional pay scales that are out there” and that the agreement will put Boeing “in better position to bid on future work.”

However, not everyone was pleased with the outcome of the deal. One employee who spoke with the St. Louis Post-Dispatch said it means her pension would be frozen after only eight years on the job and that new employees would be getting greatly reduced terms.  King admitted that layoffs could still be possible unless around 300 employees take early retirement. 

It’s thought that the deal, which was largely unpopular before the vote, was accepted to avoid the sort of turmoil that arose when Seattle-area Boeing workers rejected a new deal that almost cost them the 777X aircraft production. The rejection of that deal started a bidding war across America as states scrambled to attract Boeing and its lucrative jobs. It was later voted in by the union.