Boeing on Sunday agreed to a historic labor agreement with its unionized workers, averting a potentially catastrophic strike.
The tentative agreement for the next four-year contract, which will still need to be ratified by workers in a vote on Thursday, guarantees unionized Boeing employees in the Pacific Northwest a 25% general wage hike over the contract's term, and a commitment that the company's next plane will be built in the region.
If approved by the roughly 32,000 Boeing workers, the agreement will prevent a labor stoppage that would have been detrimental to the company as it continues to grapple with a spate of bad press and poor stock performance.
In January, a door plug from a Boeing 737 Max 9 plane came loose mid-flight, causing a window to blow out, depressurizing the cabin, and forcing an emergency landing. Safety inspectors later found numerous loose bolts in Alaskan Airlines' fleet of Boeing planes.
Then, in June, Boeing's Starliner spacecraft experienced thruster issues and helium leaks during its final flight test, leaving two NASA astronauts stuck on the International Space Station.
Wait, there's more: The company in July agreed to plead guilty to a fraud-conspiracy charge over two 737 Max crashes in 2018 and 2019 that left 346 people dead. The plea threatens its government contracts, which account for over a third of the company's annual revenue.
Last week, the Seattle Times reported that the company still hasn't reached 2019 employment levels after hemorrhaging more than 21% of its workforce between 2019 and 2020.
The company's stock price is down more than 37% this year.
While the new labor agreement represents a significant expense, it averts likely additional impacts to Boeing's share price that would have come with a work stoppage.
When Business Insider reached out for comment about the contract, a Boeing spokesperson pointed to a recent statement made to employees by the Boeing Commercial Airplanes President and CEO Stephanie Pope.
"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," Pope said in the statement.
Representatives for IAM Districts 751 and W24, the union branches representing Boeing workers in the Pacific Northwest, did not immediately respond to a request for comment from BI.
The union, in a statement published Sunday, called the agreement "the best contract we've negotiated in our history."
"Financially, the company finds itself in a tough position due to many self-inflicted missteps. It is IAM members who will bring this company back on track," the union statement read. "As has been said many times, there is no Boeing without the IAM. Ultimately, we love this company and couldn't be more proud of the jobs we do or the products we build. What we do defines who we are — these crafts are our livelihoods. When a plane leaves the factory, it's our reputation on the line. This proposal helps keep our legacy alive."
