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Boeing Gains With Earnings, Union Vote On 35% Pay Hike, Just Ahead

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7 hours ago

October 22, 2024

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Boeing Gains With Earnings, Union Vote On 35% Pay Hike, Just Ahead

Boeing reports Q3 results Wednesday, while its union members are set to vote on a deal that could end the five-week-long strike. The Dow Jones manufacturer and its machinist union on Saturday reached a tentative agreement that could potentially resume factory production. Boeing stock, lagging at its worst level in two years, has climbed to start the week.

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In its latest proposal, Boeing (BA) offered International Association of Machinists union workers a 35% wage increase over four years, up from its previous offer for a 25% raise, according to reports. Nearly 95% of the workers rejected the prior deal at the recommendation of union leaders.

Reports indicate the union is seeking a 40% raise as well as additional changes and benefits. Following the latest offer, the IAM wrote to its members, “we have received a negotiated proposal and resolution to end the strike, and it warrants presenting to the members and is worthy of your consideration.”

A simple majority will determine the outcome when the members vote, the IAM wrote.

The top earners for the union make about $51 per hour, which works out to $115,000 per year before benefits and overtime, Barron’s reported. If accepted, the new deal would push that to nearly $70 per hour by 2028, or roughly $140,000 before benefits and overtime.

The 33,000-strong worker strike that began on Sept. 13 has hobbled the Arlington, Va.-based company, which was already dealing with various quality control issues and safety concerns.

Boeing Earnings Due Wednesday

The Dow Jones plane maker on Oct. 15 secured a $10 billion credit agreement with multiple banks an filed to raise up to $25 billion in stock and debt. The company also announced plans to cut 10% of its workforce over the coming months, affecting roughly 17,000 employees.

Boeing in an Oct. 11 Q3 preview said it expects to report a GAAP loss of $9.97 per share on $17.8 billion in revenue. The company last year reported an adjusted loss of $3.26 per share on $18.1 billion in revenue.

For Wednesday’s results, FactSet predicts an adjusted loss of $10.35 per share on $18.07 billion in revenue. If Boeing meets views, year-over-year earnings would decline 218%.

Boeing also forecasts its commercial airplanes and defense divisions will incur over $5 billion in pretax earnings charges related to various delivery delays and program cancellations, in part due to the work stoppage.