WionDrive News Desk 
Boeing’s shares climbed 3% on Monday following the announcement of a proposed labor contract, raising hopes for an end to a prolonged strike that has significantly impacted production. However, analysts remain skeptical about whether the offer will gain enough support from the company’s workforce.
Approximately 33,000 employees are set to vote on the contract on Wednesday, coinciding with Boeing’s expected announcement of a substantial third-quarter loss due to the work stoppage, which has halted production of key models, including the popular 737 MAX.
The proposed contract, unveiled over the weekend, features a 35% pay increase over four years, a USD 7,000 ratification bonus, a reinstated incentive plan, and enhanced contributions to workers’ 401(k) plans, including a one-time USD 5,000 contribution and up to 12% in employer contributions. While these terms represent improvements over a previous offer that was rejected, they fall short of the 40% wage increase and restoration of a traditional pension that the International Association of Machinists and Aerospace Workers union demanded.
Workers at picket lines near Boeing’s 737 factory expressed doubts about the proposal. “It’s a decent contract, but it’s not what we asked for,” said Myles Sims, 37. Others echoed this sentiment, suggesting that Boeing needs to improve its offer to address the competitive job market.
Wells Fargo analyst Matthew Akers highlighted concerns about the contract’s approval, noting a mix of online sentiment that leaned negative, although less so than after the initial offer was rejected. Meanwhile, JPMorgan and Jefferies analysts estimated that the wage hikes could increase Boeing’s costs by USD 1 billion to USD 1.3 billion.
As negotiations have unfolded, the union leadership faced backlash from members after supporting the earlier rejected offer. Although the union has not explicitly endorsed the latest proposal, it stated that it is “worthy of your consideration.”
If accepted, Boeing will still need to navigate the challenges of ramping up production post-strike, as historical data suggests it can take 6-12 months to return to pre-strike levels. The ongoing strike has already impacted the production of Boeing’s flagship models, raising concerns about the company’s future performance. Ratings agencies have cautioned that a prolonged strike could lead to a downgrade, but some analysts view the proposal as a positive step forward.
