Boeing’s (BA) West Coast factory workers finally ended a tense seven-week strike and accepted a new contract on Monday. This strike had halted production and put a strain on the already struggling planemaker’s finances.
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Boeing’s Union Workers Voted in Favor of the Contract
Boeing’s new contract with the union workers includes wage increases of 38% over four years and other improvements. The union announced that 59% of its members voted in favor of the contract. Following the agreement, Jon Holden, the union’s lead negotiator commented, “This is a victory. We can hold our heads high. Now it’s our job to get back to work.”
Additionally, this agreement eases the pressure on Boeing’s new CEO, Kelly Ortberg, especially after two previous proposals were rejected by workers.
With the strike over, around 33,000 machinists responsible for Boeing’s key models like the 737 MAX, 767, and 777 will finally return to work after being on strike since September 13.
Will the End of the Strike Enable BA to Ramp Up Production?
Furthermore, the end of the strike means that Boeing can finally ramp up its production. However, significant challenges remain for the company. According to Reuters, 737 MAX production may stay low for some time, well below the target of 38 planes per month as the company seeks to boost cash flows. Wall Street analysts have noted that the strike was costing $100 million each day in lost revenue, resulting in the planemaker raising $24 billion from investors to maintain its investment-grade credit rating.
Is BA Stock a Good Buy Now?
Analysts remain cautiously optimistic about BA stock, with a Moderate Buy consensus rating based on 15 Buys, six Holds, and two Sells. Year-to-date, BA has declined by more than 35%, and the average BA price target of $193.62 implies an upside potential of 25.8% from current levels.
