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Boeing Strike: Union Reaches New Agreement on Wage Increase, 401k

The union represents 33,000 strikers Boeing Co. officials are presenting members with a proposal to end the work stoppage, saying the plan contains several key improvements over the plane maker’s previous offerings.

The proposal includes a 35% wage increase spread over four years, a reinstated incentive plan and an increase in company 401(k) matching, the International Association of Machinists and Aerospace Workers, which represents workers, said in a statement opinion on its website Saturday. A ratification vote is scheduled for October 23rd.

The union cited the support of U.S. Labor Secretary Julie Su, who traveled to Seattle this week to help the parties begin indirect talks. The Labor Department said Su met with the union and new Boeing CEO Kelly Ortberg and was in contact with both sides on multiple occasions.

Pressure is mounting on Boeing, its suppliers and striking workers as the strike enters its sixth week. The work stoppage, which began Sept. 13, stretches along the West Coast and has forced Boeing to close assembly lines for its cash-cow 737 Max, 767 and 777 planes.

The aircraft maker is moving forward with plans to cut 10% of its workforce, the first step in a broader reorientation of its business under Ortberg. The pain has also begun to ripple through Boeing’s supply chain Spirit AeroSystems Holdings Inc. warned it would have to lay off 700 workers building components for the 767 and 777 programs.

Boeing has taken the first steps toward raising the capital it needs to support its operations and maintain its investment-grade credit rating. The company has agreed a $10 billion credit facility with banks and filed a reserve registration to raise up to $25 billion over the next three years.

The IAM District 751 strike marks the first major labor dispute at Boeing in 16 years. As wage workers push for big wage increases and better pension benefits, they are driven by resentment that they have received paltry pay increases over the last decade while senior executives have been richly rewarded.