Boeing Reaches Tentative Deal With Striking Defense Workers

Boeing Co. reached a tentative agreement with striking hourly workers at its St. Louis-area defense factories that improves wages and restores a signing bonus, as it seeks to end a dispute that dragged on for more than a month.

The five-year contract offer expands wages by 45% on average, according to Boeing. Members of IAM District 837 will vote on the contract on Friday, representatives of the union and Boeing said Wednesday. 

“It remains the best deal we’ve ever offered to IAM 837 and we encourage our team to vote yes so we can get back to work building amazing products for our customers,” said Dan Gillian, Boeing Air Dominance vice president and general manager and senior St. Louis site executive.

Workers walked off at the start of August to secure a better wage deal. Boeing had been able to maintain fighter jet deliveries and flight tests during the strike, making the dispute less disruptive than the one that closed down much of its civil aircraft production last year and forced Boeing to shore up its finances.

Boeing’s defense business has sought to achieve a financial turnaround after years of losses and cost overruns on fixed-price contracts. Chief Executive Officer Kelly Ortberg, who joined little over a year ago, has switched out senior management at the business, and Boeing won a major contract this year when it was awarded the F-47 deal for a next-generation fighter jet. 

The latest agreement contract runs a year longer than Boeing’s initial offer and would provide a 24% average guaranteed wage increase — up from the 20% boost the company first proposed. Workers would also receive a $4,000 ratification bonus. The average wage for union members would increase from $75,000 to $109,000, Boeing said in a summary of the deal posted on its website.

Gillian declined to discuss the financial hit that Boeing suffered from the work stoppage, saying that its facilities in the heart of its military airplane hub had remained open. Still, the upheaval on the factory floors factored into the company’s offer of a smaller ratification bonus for ending the strike.

“It was appropriate for that bonus to be smaller given the disruption we’ve had over the last six weeks,” he said on a call with journalists. 

After a session with a federal mediator ended Tuesday afternoon, conversations continued between Boeing officials and the union bargaining committee into the evening and Wednesday morning. Gillian called it “a mutual conversation back and forth that helped us to get to this agreement.” 

The tentative agreement comes after Boeing put pressure on workers by threatening to hire replacement employees. The company makes fighter jets like the F-15EX and the F/A-18, as well as munitions at multiple sites in Missouri and Illinois that were involved in the strike. 

Based on the outcome of Friday’s vote, Boeing will make a decision as to whether to go forward with its plans to hire some replacement workers, Gillian said. It’ll take about a week to get everything back to working normal at the sites, he said.

Restoring the bonus once the contract is ratified was a point of contention for some striking workers, who were angry that Boeing’s earlier offer of a $5,000 payment expired when it’s initial contract was voted down.

Boeing shares pared their losses after the two sides announced the possible accord. The stock has gained 29% so far this year.