Boeing Union Members to Vote on Third Offer

Members of Boeing’s (BA) machinists union are voting today on a third contract agreement that could potentially end a crippling strike that has lasted nearly two months. 

The International Association of Machinists will vote on the new offer from Boeing that includes 38% pay increases, along with a ratification bonus that workers can elect to use as part of their retirement savings.

The union rejected a previous offer from Boeing that included a 35% pay hike, extending the strike that began on Sept. 13. 

Apart from the pay improvement, the new offer, Bank of America analysts pointed out, includes the “flexibility to allocate the previous one-time $12k ratification bonus between a paycheck, a contribution to the 401(k), or a combination of those.”

BofA analysts also noted that this time the union leadership, which is endorsing this proposal, has highlighted the risk of a worse offer from Boeing should this one be rejected. Bank of America has a neutral rating on Boeing’s stock with a price target of $149.31,

Boeing Raised Billions of Dollars from Stock Sale

Boeing recently raised billions of dollars in stock and depositary share sales to stem the cash drain from the strike. Analysts estimate the work stoppage has cost Boeing about $100 million a day.

Kelly Ortberg, who stepped into Boeing’s CEO role in August, said in a memo to employees last month that the plane maker plans to lay off about 10% of its workforce, or 17,000 workers, “over the coming months” and is postponing the launch of its first 777x jetliner.

Boeing shares are little changed Monday morning and have lost more than 40% of their value this year.