- A new union contract for Boeing (NYSE: BA) removes near-term risk to its 737 production, boosting investor confidence.
- The agreement with its largest white-collar union avoids a potential strike, ensuring stability for critical aircraft programs and deliveries.
- Shares of the aerospace giant are up, reflecting positive market reaction to the contract’s approval and its financial terms for employees.
Boeing (NYSE: BA) makes commercial jets and defense equipment. It competes with Airbus in the commercial aircraft market. Jefferies maintains a Buy rating on the stock and says a new union contract removes near-term risk to 737 production. The shares trade at $192.37.
Boeing’s largest white-collar union approves a four-year contract covering about 13,000 engineers and 4,000 technical workers. The agreement avoids a potential strike while Boeing seeks federal approval for new aircraft and works to raise production. As highlighted by Reuters, a strike could have disrupted work on two long-delayed jetliners and slowed deliveries.
The contract provides an immediate 10% raise and annual raises of 4%, with increases of up to 6% based on merit. Boeing improves its offer after workers reject an earlier proposal. Engineers approve the new deal with 67.62% voting in favor, while the technical workers’ unit approves it with 53.48% in favor.
Boeing is up $6.32, or 3.40%, at $192.37. It trades between $185.56 and $194.46 today, compared with a 52-week range of $176.77 to $254.35. About 12.4 million shares change hands, and Boeing’s market capitalization—the value of all its shares—is approximately $152.0 billion.
