Analysts optimistic that Boeing’s latest pay offer may end strike
Boeing (NYSE:BA) +3.1% in Friday’s trading on optimism that the company’s latest pay offer may win enough support to end a damaging strike by ~33K workers that has stopped most plane production.
Boeing (BA) workers are set to vote on Monday on the new proposal which raises wages by 38% over four years, above the previous 35% offer, and adds a $12K ratification bonus, although the company did not meet workers’ demand for a return to a defined benefit pension.
The proposal “looks promising since it is approaching the union’s original target of a 40% wage increase over four years,” according to S&P Global aerospace director Ben Tsocanos, adding the strike’s nearly two month duration also favors a deal.
“The proposal’s economics are a material improvement for labor,” Fitch Ratings managing director Dino Kritikos said. “Union leadership’s endorsement, unlike the most recent proposal, should help further bridge the vote towards ratification.”
Workers have the option of putting a $5K lump sum from their bonus into a 401(k) retirement account or take cash; coupled with the possibility that workers could see 20% of their salary go into retirement accounts, the option may sway pension hardliners, Jefferies analyst Sheila Kahyaoglu said.