Boeing reaches tentative agreement with IAM union

(Sharecast News) - Boeing reached a deal with its 32,000 workers belonging to the International Association of Machinists and Aerospace Workers union. The news came amid fears that possible strike action could cripple the jetmaker, pushing back production plans at a time when cash flows were already at a critical level after successive severe lapses in the quality of its planes.

Nevertheless, it was a significant win for its new chief executive officer, Kelly Ortberg, who had acted quickly to get staff onside after nearly two decades of labour disputes, knowing full well that the company's future depended on it.

The company was also facing the risk of possible downgrades of its debt ratings which would further complicate any potential fund raising exercise.

Under the terms of the agreement, workers were set to receive a 25% pay boost over the next four years.

The deal would be put to a vote by the union's members on 12 September.

The airplane manufacturer also committed to building its next commercial aircraft model in the Seattle area, thus ensuring Boeing's long-term presence in the Pacific Northwest.

Also included was a greater say for unions in the safety and quality of the production system, together with improved retirement benefits.