• Boeing machinists voted 59% in favor of the new contract on Monday, ending a costly strike.
• The deal offers 38% in raises over four years.
• The company's more than 32,000 unionized machinists had walked off the job on Sept. 13 after turning down a tentative labor agreement.

Boeing machinists approved a new labor deal Monday, ending a costly seven-week strike that halted most of the company's aircraft production, worsening its mounting losses.

Machinists voted 59% in favor of the new contract, which includes 38% wage increases over four years and other improvements.

The approval is a relief for Boeing's new CEO, Kelly Ortberg, who took the top job in August to steer the company through its safety and manufacturing crises. The company raised more than $20 billion in a share sale last week to weather its financial problems after warning it will likely burn cash through 2025.

Ortberg last month said Boeing will cut 10% of its 170,000 workforce including mangers, executives and employees, to slash costs, with layoff notices going out in mid-November. He painted a picture of a leaner Boeing, focusing on its core commercial and defense businesses.

"While the past few months have been difficult for all of us, we are all part of the same team. We will only move forward by listening and working together," Ortberg said after the contract passed. "There is much work ahead to return to the excellence that made Boeing an iconic company."

Boeing will now be able to resume production, key to its recovery since the bulk of the aircraft price is paid when they are handed over to customers. But getting up to target production rates, particularly for the 737 Max, Boeing's cash cow, will take time.

"While the strike ending and workers returning to the shopfloor is a meaningful step in the right direction, ramping back up will take time," said Bank of America aerospace analyst Ron Epstein. He said some workers will need to be retrained.

The machinists, who build planes such as the bestselling 737 Max, the 777 and 767 aircraft must return to their jobs no later than Nov. 12 the union said. They could return as early as Wednesday.

"Yesterday's resolution of the strike was low hanging fruit in our view," Jonathan Root, senior vice president at Moody's Ratings, said in a note Tuesday. "Relieving the impediments to achieving and then sustaining strong positive free cash flow remains the challenge."

President Joe Biden spoke with union leaders and Boeing's CEO on Tuesday to congratulate them on the deal, the White House said. Acting Labor Secretary Julie Su had gotten involved with the negotiations, flying to Seattle to meet with the union and the company, a top U.S. exporter and defense contractor.

"This contract provides a 38% wage increase over four years, improves workers' ability to retire with dignity, and supports fairness at the workplace," Biden said in a statement. "This contract is also important for Boeing's future as a critical part of America's aerospace sector."

Third vote

It was the machinists' third vote since September, when the 33,000 workers, mostly in the Seattle area, walked off the job after overwhelmingly rejecting a proposal promising a 25% raise, far short of the 40% the union sought. They voted down another sweetened proposal late last month.

Union urged approval

"This is a victory. We can hold our heads high," said International Association of Machinists and Aerospace Workers District 751 President Jon Holden as he announced the results late Monday.

Boeing said machinist pay will average $119,309 at the end of this contract proposal. The first wage rise will be 13%. The contract also increases 401(k) contributions and a signing bonus of up to $12,000 or a combination of a $7,000 bonus and $5,000 401(k) deposit.

Workers had complained about the skyrocketing cost of living in the Seattle area, where most of Boeing's aircraft are produced.

But the union had warned that the latest deal, which was proposed last week, might be as good as workers can expect to get.

"In every negotiation and strike, there is a point where we have extracted everything that we can in bargaining and by withholding our labor," IAM District 751 said in a statement then. "We are at that point now and risk a regressive or lesser offer in the future."