Boeing’s new proposal may lead to $1b in wage-related costs over four years

Boeing is expected to book more than $1b in wage-related expenses from its proposed labor contract, analysts said, although its shares rose 4% on Monday on hopes of an end to a crippling strike. About 33,000 workers will vote on the contract proposal on Wednesday after a more than month-long work stoppage, which has halted production of models including its best-selling 737 MAX narrowbody jets. The vote also coincides with Boeing's third-quarter results, in which it is expected to report a hefty loss. "We view the proposal as a positive step," Ben Tsocanos, aerospace director at ratings agency S&P Global, said in an email to Reuters. "Resolving the strike quickly is key to improving the company's financial position and supporting the rating." The new contract proposal announced on Saturday includes a 35% pay hike over four years, a $7,000 ratification bonus, a reinstated incentive plan and enhanced contributions to workers' 401(k) retirement plans, including a one-time $5,000 contribution plus up to 12% in employer contributions. The new wage increase and the ratification bonus are an improvement over the previous offer, which was rebuffed by the striking workers, but the salary hikes still fall short of a 40% pay rise over four years demanded by the Machinists' union. "But will the members accept? We can't say for sure, though it does seem to offer nearly all the union asked for," J.P. Morgan analyst Seth Seifman wrote in a note.<br/>