Boeing and the leaders of its union have reached a “negotiated proposal” that could end the weeks long strike.
Transcript:
CONWAY GITTENS: Stocks are coming off a six week winning streak – the longest of 2024. Wall Street is gearing up for one of the busiest weeks of earnings season so far. Some 112 companies within the S&P 500 are set to release results. Meanwhile, Walt Disney is making news this Monday. James Gorman, the former CEO of Morgan Stanley, has been appointed new chairman of the board. A CEO to replace Bob Iger won’t come until 2026.
Turning to other corporate headlines….It could be a make or break moment for Boeing. The 33,000 machinists who have been on strike for more than a month have a new contract proposal to vote on. If Boeing can get this contract through – it can get factories back to work and stop losing approximately $1 billion a month.
This latest offer comes with a 35 percent pay hike stretched across four years. It also comes with a $7,000 ratification bonus plus a one-time deposit of $5,000 into each worker’s 401K plan. In addition, Boeing has agreed to contribute up to 12 percent into retirement accounts. The new package is expected to tack on more than $1 billion in additional labor costs for Boeing.
The union was fighting for a 40 percent pay hike and the reinstitution of a traditional defined benefit pension plan. Some analysts who cover the stock worry the offer – though better than the last – may still not be good enough to convince machinists to go back to work. The International Association of Machinists and Aerospace Workers did not explicitly endorse this latest offer but did tell workers “it is worthy of our consideration.”
Even if workers were to return to factory floors this week, one analyst pointed out that it takes an average of 6 to 12 months after the strike has ended for Boeing to return to full production levels.
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