This new offer, which proposes a 38% wage increase over four years, enhances a previous 35% proposal and includes a $12,000 ratification bonus, although it does not fulfill the workers' request for a return to a defined-benefit pension plan. Boeing employees are scheduled to vote on this proposal on Monday after having previously rejected two offers.
Ben Tsocanos, aerospace director at S&P Global Ratings, noted, "This proposal appears promising as it nears the union's initial goal of a 40% wage increase over four years. Additionally, the nearly two-month duration of the strike may favor reaching an agreement."
The ongoing seven-week strike has disrupted the production of Boeing's top-selling 737 MAX jets, along with the 767 and 777 widebody aircraft, resulting in a $6 billion loss in the third quarter and complicating CEO Kelly Ortberg's efforts for a turnaround.
Wall Street analysts have been monitoring social media and Reddit discussions to assess workers' sentiments, as these sentiments have previously influenced the outcomes of earlier votes.
Reactions to the new proposal among workers have been mixed, according to interviews conducted by Reuters. The machinists' union has stated that it has maximized its negotiations but cautioned that future offers could be less favorable.
Dino Kritikos, managing director at Fitch Ratings, commented, "The economic terms of the proposal represent a significant improvement for labor. The union leadership's support, unlike that of the last proposal, should help facilitate a favorable vote for ratification."
Workers have the choice to allocate a portion of the $5,000 bonus into their 401(k) retirement accounts or opt for cash.
The combination of that option and the potential for employees to allocate 20% of their salaries to retirement accounts could influence pension advocates, according to Jefferies analyst Sheila Kahyaoglu in a recent note.
Kahyaoglu noted that workers have experienced an average wage loss of $10,400 during the strike, surpassing the average first-year pay increase proposed. She also mentioned that Boeing's recent capital infusion enhances its leverage in negotiations.
Since the strike commenced in September, the company's shares have declined by 8.3%.