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Global aerospace major Boeing on Sunday announced it has reached a tentative pay agreement with the International Association of Machinists and Aerospace Workers (IAM) which represents more than 33,000 employees. 

The pact has ended weeks of intense negotiations and avoiding a potential strike.

“We've heard what’s important to you for the new contract. And we have reached a tentative agreement with the union on a historic offer that takes care of you and your family,” said Stephanie Pope, Boeing Commercial Airplanes President and CEO.

The contract offer provides the largest-ever general wage increase, lower medical cost share to make healthcare more affordable, greater company contributions toward your retirement, and improvements for a better work-life balance.

The IAM has been asking for a 40 per cent pay increase during their first full negotiation with Boeing in 16 years.

Pope further said that this contract deepens the company’s commitment to the Pacific Northwest.

“Boeing’s roots are here in Washington. It is where generations of workers have built incredible airplanes that connect the world. And it’s why we’re excited that, as part of the contract, our team in the Puget Sound region will build Boeing’s next new airplane,” he said in a statement.

This would go along with our other flagship models, meaning job security for generations to come. It’s a big commitment to you and to our community, added the Boeing CEO.

More than 33,000 employees are represented by “IAM 751” primarily in Washington and “W24” in Portland, Oregon. There is also a small group of employees in California.

“This is the first full negotiation between Boeing and IAM 751 and W24 in 16 years. After ratification of a new contract in 2008, employees approved two contract extensions in 2011 and 2014. The current 8-year extension began in 2016,” according to the company.

Boeing develops, manufactures and services commercial airplanes, defence products and space systems for customers in more than 150 countries.