Boeing machinists end the strike and approve a labor contract with 38% increases

boeing Machinists approved a new labor agreement on Monday, ending a costly seven-week strike that halted most of the company’s aircraft production, worsening its mounting losses.

Train drivers voted 59% in favor of the new contract, which includes salary increases of 38% over four years and other improvements.

The approval is a relief for Boeing’s new CEO Kelly Ortberg, who took the top job in August to guide the company through its safety and manufacturing crises. The company raised more than $20 billion in a stock sale last week to address its financial problems after warning it will likely burn through cash through 2025.

Ortberg said last month that Boeing will cut 10% of its 170,000 workforce, including managers, executives and employees, to cut costs, with layoff notices to be issued in mid-November. He painted a picture of a more efficient Boeing, focusing on its core commercial and defense businesses.

“Although the last few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together,” Ortberg said after the contract was approved. “There is much work ahead to return to the excellence that made Boeing an iconic company.”

Boeing will now be able to resume production, key to its recovery since most of the price of the planes is paid at the time of delivery to customers. But reaching target production rates, particularly for the 737 Max, Boeing’s cash cow, will take time.

“While ending the strike and returning workers to factories is a significant step in the right direction, it will take time to recover,” said Bank of America aerospace analyst Ron Epstein. He said some workers will need to be retrained.

Machinists, who build planes such as the best-selling 737 Max, 777 and 767, must return to their jobs by Nov. 12, the union said. They could return on Wednesday.

President Joe Biden congratulated the union and the company, one of the country’s largest exporters, for reaching the agreement. Acting Labor Secretary Julie Su became involved in the negotiations and met with both sides.

“This contract provides a 38% wage increase over four years, improves workers’ ability to retire with dignity, and supports equity in the workplace,” Biden said in a statement. “This contract is also important to Boeing’s future as a critical part of the U.S. aerospace sector.”

It was the third vote by machinists since September, when 33,000 workers, mostly in the Seattle area, walked off the job after overwhelmingly rejecting a proposal promising a 25% raise, well below the 40% that the union was looking for. They voted against another improved proposal late last month.

“This is a victory. We can hold our heads high,” International Association of Machinists and Aerospace Workers District 751 President Jon Holden said in announcing the results Monday night.

Boeing said machinist pay will average $119,309 at the end of this contract proposal. The first salary increase will be 13%. The contract also increases 401(k) contributions and a signing bonus of up to $12,000 or a combination of a $7,000 bonus and a $5,000 401(k) deposit.

Workers had complained about the rising cost of living in the Seattle area, where most of Boeing’s planes are produced.

But the union had warned that the latest deal, proposed last week, might be the best workers can hope to get.

“In every negotiation and strike, there is a point at which we have extracted everything we can by negotiating and retaining our work,” IAM District 751 said in a statement at the time. “We are at that point now and are at risk of a regressive or lower supply in the future.”