Boeing shares rise on labor deal, Starliner return

Boeing’s (NYSE:BA) stock rose as much as 4.4% on Monday after a weekend of positive news for the aircraft maker. It agreed to a 25% pay hike with its biggest labor union to avert a potential strike, and its troubled Starliner spacecraft landed safely in New Mexico.

“We view both ‘landings’ as meaningful positives for Boeing, sentiment around the name, and for [new Chief Executive] Kelly Ortberg as he works to move the company forward,” Ronald Epstein, analyst at Bank of America Securities, said in a Sept. 8 report.

Boeing’s (BA) contract negotiations with members of the International Association of Machinists & Aerospace Workers have been closely watched because a worker strike not only would hurt Boeing (BA), but also thousands of its suppliers and their employees.

Leaders of IAM Districts 751 & W24 have recommended that their 33,000 members vote in favor of the deal. If instead they reject the contract and two-thirds vote to strike, they would walk off the job at midnight on Friday.

The final offer from Boeing (BA) included 25% in gross wage increases over the life of the four-year agreement, lower employee healthcare costs, more employer-funded retirement benefits and union representation on the company’s safety and quality system. Boeing (BA) also agreed to build its next commercial airplane in the Puget Sound region if it’s launched during the agreement.

Epstein said BofA will maintain its Neutral rating on Boeing (BA) because the worker vote on the deal hasn’t been completed. Going into the negotiations, the union had pushed for a 40% pay hike and job security.

“Given the strong member sentiment regarding the return of a pension and 40% wage increases, there is some risk the deal could be rejected,” Epstein said. “If the deal is accepted, we see this as a benefit for the industry overall and would help avoid further OEM delivery disruption.”

Starliner Returns

In another key development, Boeing’s (BA) Starliner capsule undocked from the International Space Station and landed at the White Sands Space Harbor in New Mexico. The return to Earth appeared to go as planned, though the spacecraft came back without a crew as had been planned originally.

In another key development, Boeing’s (BA) Starliner capsule undocked from the International Space Station and landed at the White Sands Space Harbor in New Mexico. The return to Earth appeared to go as planned, though the spacecraft came back without a crew as had been planned originally.

The National Aeronautics and Space Administration and Boeing (BA) had conceived of the Starliner as a capsule capable of touching down on land, making it easier to recover crew and cargo. They launched the spacecraft in June with NASA astronauts Barry Wilmore and Sunita Williams on a mission to the ISS. The plan was to ferry the astronauts home about a week later, showing the Starliner’s capabilities.

After the spacecraft ran into technical problems that raised concerns about its safety, NASA last month decided to enlist Elon Musk’s SpaceX bring the astronauts home in February. The decision frustrated Boeing (BA) teams who claimed the Starliner was safe.