Boeing Co, the world's largest aircraft maker, reached the quickest labor settlement in four decades with its machinist union to resume production in the strongest commercial plane market in about five years.
The company proposed a three-year contract to end the 24-day strike that will boost pension payments and drop a requirement for workers to pay more of medical insurance costs.
Leaders of the International Association of Machinists and Aerospace Workers recommended that union members ratify the offer on Thursday, Chicago-based Boeing said in a statement late yesterday.
About 19,000 workers shut down Boeing's commercial jet production by walking off on Sept. 2. Alan Mulally, head of Boeing's commercial jet business had said at the start of the walkout that it may cause delivery delays that would give Airbus SAS an advantage in its marketing campaigns for new jet sales.
"Getting an agreement sooner rather than later is the right thing to do for our employees, customers, investors and our communities," Mulally said in a memo to Boeing managers.
Mulally had met with union officials in Washington on Friday to resolve the labor dispute.
As many as 30 plane deliveries will be delayed because of the strike, Boeing chief financial officer James Bell said at a conference in Phoenix on Sept. 14. Boeing orders have surged amid demand for its more fuel-efficient 787 Dreamliner model that begins service in 2008.
Boeing's third-quarter profit would be reduced by at least US$0.14 a share if the strike wasn't resolved by the end of the month, analysts have said. A 30-day strike would reduce revenue by about US$2.1 billion, DA Davidson & Co analyst JB Groh said.
Shares of Boeing rose US$0.69 to US$63.20 in New York Stock Exchange composite trading last Friday. They've risen 22 percent this year.
The agreement is the quickest since a 19-day strike was settled in 1965. It covers workers in the Puget Sound region of Washington; Portland, Oregon and Wichita, Kansas. The machinists, whose average age is about 50 years old, are paid about US$59,000 a year.
Workers will receive a bonus equal to 8 percent of a year's pay if the contract is approved. Boeing will also give US$3,000 bonuses to members at the end of next year and 2007. A 5.5 percent wage increase over three years proposed in the original contract proposal was dropped.
The earlier offer gave less to the Wichita machinists, citing a lower cost of living in that region.