Boeing cuts deal to avoid strike by 30,000 machinists that could halt aircraft production out of US

Boeing and its largest union say they have reached agreement on a new contract that, if ratified, will avoid a strike that threatened to shut down aircraft production by the end of the coming week.

Boeing said 33,000 workers represented by the International Association of Machinists and Aerospace Workers would get pay raises of 25 per cent over the four-year contract, with average wages rising 33 per cent due to seniority step increases.

That is less than the 40 per cent the union had demanded during negotiations.

But the company agreed with a key union demand to build its next plane in the US state of Washington, presumably by union members.

Workers also would get $US3,000 ($A4,500) lump sum payments and a lower share of health care costs, Boeing said.

“Negotiations are a give and take, and although there was no way to achieve success on every single item, we can honestly say that this proposal is the best contract we’ve negotiated in our history,” Jon Holden, president of IAM District 751, the machinists’ union outpost at Boeing, said in a statement posted on the union website.

The union’s bargaining committee is recommending that members ratify the contract, Holden said.

The president of Boeing’s commercial airplanes division, Stephanie Pope, said on Sunday in a video for employees that the proposed contract includes the company’s largest-ever general wage increase.

She said the promise to build Boeing’s next new airliner in the Puget Sound area means job security for generations to come.

The proposed contract is contingent on union members ratifying it by latem on Thursday night Pacific time, after which the union was threatening to strike.

The union has scheduled a two-part election for Thursday, with workers voting whether to accept the contract and whether to authorise a strike if they reject the offer.

Voting will occur at about a half-dozen locations in Washington state and one in California.

A strike would have added to the obstacles facing Boeing, which is hurtling toward a sixth straight money-losing year and just hired a new CEO to turn things around.

The new chief executive, Kelly Ortberg, will try to reverse $US27 billion in losses since the start of 2019.

His assignment includes fixing problems in Boeing’s aircraft-manufacturing process, gaining regulatory approval for the long-delayed 777X jumbo jet, limiting damage from over-budget government contracts, paying down $US45 billion in net debt and absorbing Spirit AeroSystems, the money-losing key supplier that Boeing just bought for $US4.7 billion.