The $1B Question: Will Boeing’s Machinists Accept the "New" Deal or Keep the Strike Going?

Well, folks, it looks like Boeing and its machinists’ union have finally decided to play nice. After a five-week strike that’s been burning a hole in Boeing’s already cash-strapped pockets, the two sides have reached a tentative deal that could end the drama. And by “tentative,” I mean machinists are set to vote on Wednesday to see if this new proposal is worth putting down their picket signs. Spoiler alert: the deal includes a 35% wage increase over four years. Gucci. 

(Source: Giphy) 

In short, the union, representing over 30,000 machinists (a.k.a. the folks who actually build the planes), rejected Boeing’s previous offers faster than you can say "door plug blowout." But this time around, Boeing sweetened the pot with a $7,000 signing bonus, higher 401(k) contributions, and guaranteed minimum payouts in an annual bonus program. Meaning, Boeing executives are basically shouting “please, for the love of all that flies, just come back to work.”

(Source: Wall Street Journal) 

The proposal comes after weeks of back-and-forth, with Acting U.S. Secretary of Labor Julie Su stepping in to play mediator. And while it’s not the 40% pay bump the union originally wanted, it’s a far cry from the 25% that had machinists walking out the door in mid-September. 

Oh, and about that strike— remember, it’s been costing Boeing an estimated $1 billion a month. So yeah, getting this deal ratified is in everyone’s best interest. Unless, of course, Boeing’s into lighting money on fire. In that case, carry on…

(Source: King News) 

Especially since the company has already had a rough year between production pauses, safety concerns, and that clusterf***k fiasco  involving a door panel falling off a 737 MAX mid-flight. Meaning, even before this strike Boeing was already hemorrhaging cash - being forced to cut about 17,000 jobs and is now planning to take on up to $25 billion in debt just to keep the lights on. So, yeah, the company really needs this strike to end.

(Source: Giphy) 

For the workers, this new contract is a step in the right direction, but it’s not all rainbows and pension plans. While the wage boost and bonuses are nice, the union didn’t quite get everything it wanted. The big one? Pensions. Those aren’t coming back, despite being a major sticking point for many machinists. Instead, Boeing is bumping up 401(k) contributions and throwing in a one-time $5,000 payment to everyone’s retirement accounts. Not exactly “bring back the good old days,” but hey, it’s something. 

(Source: LA Times) 

Now looking ahead, the machinists will vote on Wednesday, and if more than 50% of them give the thumbs-up, the strike will officially be over, and production lines can (slowly) start cranking back up. But don’t expect Boeing to immediately hit the ground running. Restarting operations after a month-long pause is like trying to jump-start a cold engine—there’s bound to be a few kinks along the way.

(Source: Giphy) 

And if the deal doesn’t get approved? Well, Boeing’s already on the hook for billions in losses, and every day the strike drags on, that number climbs higher. In any case, Boeing’s watching Wednesday’s vote closely. After all, with $6 billion in quarterly losses looming, they need this win like a desert needs rain.

In the meantime, keep your eyes glued on whether this works out for Boeing and as always stay safe and stay frosty, friends! Until next time…

P.S. Yeah, I know it’s Monday—you're probably still trying to figure out how your weekend flew by so fast, but trust me, this is worth your attention. Last week’s alert popped 203%! $QNRX exploded, and premium subscribers grabbed it at $0.51 before it rocketed to $1.56 in under four hours. Don’t miss the next one—click here now, and then you can get back to figuring out how many coffees it’s going to take to survive today.

Stocks.News does not hold positions in companies in the article.