Boeing Shares Rise Amid New Wage Offer to End Strike

Boeing shares increased by 2% during early trading on Friday after the company presented a new wage hike proposal aimed at approximately 33,000 workers who are currently on strike. This initiative marks Boeing's third attempt to resolve the situation, which has been ongoing since September.

The latest offer includes a wage increase of 38% over four years, which is a boost from the previous offer of a 35% increase. Additionally, the company has proposed a ratification bonus of $12,000 to further incentivize workers. However, the new offer does not address a significant demand from workers to reinstate a defined-benefit pension plan.

To provide flexibility, employees have the choice to place a portion of the bonus—specifically, $5,000—into their 401(k) retirement accounts or receive it in cash. This option, combined with the fact that workers could potentially allocate 20% of their salary into retirement savings, may appeal to those who are staunch supporters of pension plans, as noted by Jefferies analyst Sheila Kahyaoglu.

Despite the attractive nature of the proposal, it remains uncertain how workers will respond. The Machinists union has shown support for Boeing's latest offer, claiming they have done their best to negotiate, while also cautioning that future offers could be less favorable.

The ongoing strike has disrupted production lines at Boeing, especially affecting the manufacturing of its popular 737 MAX jets, as well as the 767 and 777 widebody aircraft. The company has reported significant financial losses, estimating around $6 billion in the third quarter alone, which complicates the efforts of CEO Kelly Ortberg to turn the situation around.

Since the strike commenced, Boeing shares have decreased by 8.3%. Wall Street analysts are closely monitoring social media platforms to understand workers' sentiments, particularly as previous contract proposals were rejected despite expectations to the contrary.

Boeing, strike, wage