Boeing shares rise after tentative labor deal that could avert major strike By Reuters

(Reuters) – Shares in Boeing (NYSE: possible paralyzing strike this week.

If approved, the proposed four-year contract, which includes a 25 percent overall pay increase and a commitment to build the next commercial jet in the Seattle area, is a major win for Kelly Ortberg, who took over as Boeing CEO last month past.

The International Association of Machinists and Aeronautical Workers (IAM), which represents 32,000 workers, called it the best contract it had ever negotiated. The contract will be put to a vote on Thursday.

With “IAM leaders unanimously recommending a vote to accept the proposal, it is unlikely the deal will be rejected,” Jefferies analyst Sheila Kahyaoglu said in a note.

That would mark a victory for Boeing as it tries to restore investor and customer confidence, navigate regulatory scrutiny and ramp up production of the 737 MAX after a plug from a near-new MAX blew up an airliner while it was aired in early January.

Since that incident, Boeing’s share price has fallen 37%, compared with a 7.7% rise in the Dow.

The labor agreement, which is the first full new contract for Seattle-area workers in 16 years, also includes better retirement benefits and gives the union greater input into the safety and quality of the manufacturing system, one of Ortberg’s mandates .

Workers can strike as early as Friday, September 13, if they reject the contract.

The pay increase will likely set Boeing back $900 million over four years, compared with Jefferies’ initial estimate of $1.1 billion, Kahyaoglu said.