Boeing supplier Spirit AeroSystems reached a tentative deal with its mechanist union late Tuesday ahead of a Thursday vote to end a strike. Spirit on Thursday suspended production at a plant in Wichita, Kansas employing about 6,000 workers at after rejecting the workers rejected a compensation agreement from the company. Boeing stock rose Wednesday while Spirit AeroSystems pared premarket gains following the news.
Spirit AeroSystems manufactures the fuselage system for Boeing's 737 MAX jets and forward systems for other aircraft models. The company also makes pylons for Airbus, which connect the engines to the airframe of the jets. Other major Spirit customers include Northrop, Lockheed Martin, Bell Helicopter and Bombardier.
Spirit and employees represented by the International Association of Machinists and Aerospace Workers (IAM) have been negotiating a new four-year compensation contract since May. Eighty five percent of the union-represented employees voted to start striking on June 24 after rejecting the "best and final offer" from Spirit on June 21, according to reports.
The two parties appear to have reached a tentative contract agreement late Tuesday. The four-year contract includes a minimum increase in wages of 23.5% over the lifetime of the deal, as well as guaranteed 2% annual bonuses and cost of living adjustments. Workers will also receive a $3,000 signing bonus if the contract is accepted by Thursday, Reuters reported.
Spirit, Boeing Stock Action
SPR stock edged 1% lower to 28.96 Wednesday after climbing 1.6% premarket. Shares tumbled 9.4% on June 22 after the strike was announced.
Boeing stock rose 0.6% to 210.67 early Wednesday after gaining 1.3% in premarket action. BA shares surpassed the 221.33 buy point for a flat base on June 12. They have since retreated about 5% from the entry.
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