Investing.com -- Shares in Boeing (NYSE:BA) moved higher in premarket US trading on Monday, after the aerospace giant and the union representing tens of thousands of striking machinists announced over the weekend that the employees will vote on a new contract proposal this week.
The updated deal will include a 35% pay bump over four years for the roughly 33,000 workers in the US Pacific Northwest who are currently holding a more than five-week old work stoppage. The strike has threatened Boeing's already strained finances, put its credit rating in jeopardy of slipping into junk territory, and led to a halt in production for some of its top-selling planes.
According to the International Association of Machinists and Aerospace Workers (IAM) Local 751, which represents the workers, the updated offer includes a $7,000 ratification bonus and a reinstated incentive plan. Greater contributions will also be plugged into employees' 401(k) retirement plans, including a one-off $5,000 contribution and up to 12% in employer contributions.
IAM members are set to vote on the proposal on Wednesday. Details of the potential strike settlement, such as the date on which workers would return to their posts, will be part of the vote, the IAM said.
"The workers will ultimately decide if this specific proposal is sufficient in meeting their very legitimate needs and goal of achieving respect and fairness at Boeing," the union added.
Boeing, meanwhile, has said it is looking "forward to our employees voting" on the negotiated agreement.
In a note to clients, analysts at JPMorgan Chase (NYSE:JPM) said there is new hope that the accord can bring an end to the labor action. They also called Wednesday a "big day" for Boeing, flagging that both the union vote and the group's latest quarterly results are due out then. It will also be Boeing Chief Executive Kelly Ortberg's first chance to address investors and the broader public, the analysts said.
Last week, Boeing filed a registration statement with the US markets regulator that will allow it to raise up to $25 billion via a mixture of debt securities and other classes of stock. In the filing, the embattled jetmaker did not say when or exactly how much it will raise through the offering, although media reports have suggested that a share sale could come before the end of the year due to impending debt maturities.
The company also announced it had secured a $10 credit line from banks including JPMorgan Chase, Bank of America (NYSE:BAC), Citigroup and Goldman Sachs (NYSE:GS) as part of a bid to shore up its finances. Boeing has previously said it will book $5 billion in the third quarter and unveiled job cuts amounting to 10% of its global headcount.
Ortberg told employees earlier this month that "tough decisions," such as structural changes, will be needed to bolster the performance of the wider business and ensure its long-term competitiveness.