Boeing (NYSE:BA) workers are voting on a new labor contract on Thursday, setting up the potential for a crippling strike if staff members decide to reject the deal just as the plane-maker is trying to ramp up its production.
The tentative agreement that the International Association of Machinists and Aerospace Workers and the company unveiled on Sunday included 25% wage increases and other improvements to health-care and retirement benefits. Boeing also committed to build its next aircraft in the Seattle area.
The vote is the first major test for CEO Kelly Ortberg, who said in a staff note on Wednesday that he has talked with employees about the contract in Renton, Washington, and Everett, Washington, where Boeing’s main factories are located.
Ortberg is just over one month into his role in the manufacturer’s top job, and has been tasked with steadying production and stamping out safety lapses and quality flaws in the wake of a door-panel blowout at the start of the year.
The union, which represents about 33,000 Boeing factory workers in the Seattle area and in Oregon had sought some 40% pay raises from Boeing. But the 25% increase would be in line with the United Auto Workers’ deal last year that followed strikes at Ford (NYSE:F), General Motors ) (NYSE:GM)and Chrysler-parent Stellantis (NYSE: STLA).
BA shares dropped 10 cents to begin Thursday at $161.14.
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