Boeing Shares Rise Premarket as 2-Month Strike Ends, Retail Traders Show Early Optimism

Boeing Co. ($BA) shares rose as much as 2% before markets opened on Tuesday after its factory workers voted to accept the latest contract offer and end the strike that had halted production across the West Coast. 

After three previous rejections, this contract iteration gained a 59% majority among union members on the eve of the 2024 US Election.

The initial agreement offered a 25% raise but the machinists almost unanimously voted that proposal down, kicking off the strike on Sept. 13. The newest contract includes a 38% wage increase over four years, along with ratification and productivity bonuses.

However, Boeing refused to meet strikers’ demand to restore the company’s pension plan which was discontinued nearly a decade ago.

Bank of America analysts estimated last month that Boeing was losing about $50 million per day during the strike.

“The strike has ended,” the local district of the International Association of Machinists and Aerospace Workers (IAM), which represents more than 30,000 workers at Boeing, said in a post on X (formerly Twitter). 

The workers have till Nov. 12 to return to the assembly lines that have been idle for 53 days. 

Retail sentiment grew increasingly bullish (66/100) ahead of the vote, closing Monday on a positive note. This optimism followed the IAM’s recommendation that members vote in favor of the contract.

The recent strike has had a significant impact on Boeing, leading to furloughs and planned layoffs amounting to 10% of its workforce before Thanksgiving. 

To prevent a junk rating downgrade amid the strike, Boeing raised over $20 billion last week, describing the strike as a major risk. 

In its latest earnings report, Boeing warned that it expects to continue losing cash through 2025, with investors focused on its cash flow after multiple cash infusions this year. 

Boeing’s stock has dropped 38% year-to-date in 2024.

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Read more: Boeing Secures $35B Financing to Tackle Production Delays and Cash Flow Woes, But Retail Stays Bearish