Boeing shares higher as striking union endorses 38% pay bump

Investing.com -- Boeing (NYSE:BA) shares inched higher in premarket US trading on Friday after the union representing the roughly 33,000 striking workers endorsed a new pay offer than includes a 38% wage bump over the next four years.

The announcement has raised renewed hopes for an end to the seven-week old work stoppage, which has weighed heavily on Boeing's finances, hit jet production, and threatened to drag the aerospace giant's credit rating down into junk territory.

Employees, who previously rejected two other revised pay proposals from Boeing, are due to vote on the latest deal on Nov. 4. The fresh offer features a $12,000 signing bonus, combining Boeing's previous proposal of $7,000 and a $5,000 lump sump payment into workers' 401(k) retirement benefits.

The Boeing workers based in the US West Coast have been pushing for a 40% pay jump and the return of a defined-benefit pension scheme which was scrapped a decade ago.

However, in a social media post, the International Association of Machinists and Aerospace Workers union, which is negotiating on behalf of the workers, urged its members to "lock in these gains and confidently declare victory."

As it grapples with the ramifications of the strike, new Boeing CEO Kelly Ortberg has called for a "fundamental culture change" at the company, which has also faced recent scrutiny over its safety record following a dangerous mid-air door plug blow-out on one of its planes earlier this year.

Ortberg has said the firm is at a "crossroads" after it posted a net loss of $6.17 billion in the third quarter, widening from a loss of $1.64 billion in the corresponding period in 2023.

Earlier this week, Boeing said it raised around $21 billion in an upsized share sale, with the capital raise aimed at shoring up its cash position.