Boeing Shares Surge 4% as Union Approves New Contract

Boeing shares surged about 4% Thursday after its largest white-collar union approved a new four-year contract, removing the threat of a strike that could have disrupted production and certification work at the aircraft maker.

The Society of Professional Engineering Employees in Aerospace (SPEEA) represents roughly 17,000 Boeing engineers, scientists, technicians, and other workers. The union's bargaining units voted to ratify the improved offer, with about 68% of members in the professional unit backing the agreement. This unit represents roughly 13,000 engineers and scientists.

The new contract provides a 10% wage increase upon ratification, followed by annual raises of 4%. There is also the potential for an additional 2% performance-based increase. The agreement avoids a repeat of SPEEA's 2000 strike, which lasted 40 days and disrupted commercial aircraft production and deliveries.

Boeing continues to work through production and delivery challenges while seeking to ramp up output of its best-selling aircraft. The company's initial contract offer had tied guaranteed wage increases to inflation, with raises capped at 3%, plus as much as an additional 2.5% based on performance. The revised proposal increased the guaranteed raises.