Boeing shares rise after announcing an agreement with the union and avoiding a possible strike

Boeing (BA) shares jumped in premarket trading on Monday, a day after the plane maker announced a tentative agreement with two of its largest union partners.

The deal would give about 33,000 Boeing employees in Washington, Oregon and California salary increases of 25 percent over the next four years, as well as other benefits such as a revised retirement savings program and parental leave, the company said Sunday.

Four-year contract to be voted on Thursday

Members of the International Association of Machinists and Aerospace Workers, who are covered by the contract, are expected to vote on ratifying the four-year deal on Thursday, when the current contract expires. The expiration of the previous contract could have led to a strike that would have halted production at several plants.

In addition to the salary increases, the deal also includes lump sum payments of $3,000 for each covered employee, improved health insurance benefits and reduced overtime. The company also committed to building Boeing's next-generation aircraft at its Puget Sound plants.

“The contract offer includes the largest across-the-board wage increase ever, a lower medical cost share to make health care more affordable, higher company contributions to your retirement plan and improvements for a better work-life balance,” said Stephanie Pope, chief executive officer (CEO) of Boeing Commercial Airplanes, in a message to employees.

Two hours before the market opened on Monday, Boeing shares were 4.5% higher at $164.69, but are still down nearly 37% since the start of 2024 due to a series of safety issues and leadership changes.