Aircraft manufacturer Boeing and its striking machinist union, the International Association of Machinists (IAMAW), have announced a tentative truce to bring to an end a 53-day-old strike that started in the first week of September.

The news of the truce buoyed Boeing shares on Wall Street by 15.5 per cent, trading at $48.91 on Tuesday. Boeing's stock had dropped as low as $39.99 earlier in the month, marking its lowest point since March 2004.

The agreement was reached after five days of discussions in Washington. IAMAW's 27,000 member machinists are expected to vote on the agreement later in the week, even it has been unanimously endorsed by union leadership.

In a statement, Boeing said that the company had reached a tentative agreement with the International Association of Machinists and Aerospace Workers on a new four-year contract covering 27,000 employees in Washington, Oregon and Kansas. 

Its statement said that Boeing had retained the flexibility necessary to manage its business, while making changes to the contract language to address the union's issues on job security, pay and benefits. 

The aircraft maker said the offer provides general wage increases every year and increases pension benefits. Additionally, Boeing is proposing no changes to the cost share employees currently pay for a selection of outstanding health care plans. It said that by mutual agreement, details of the agreement would be released first by the union.

"This is an outstanding offer that rewards employees for their contributions to our success while preserving our ability to compete," said Scott Carson, president and CEO of Boeing Commercial Airplanes. 

"I thank both negotiating teams and the federal mediator for their hard work and commitment in reaching this agreement. We recognize the hardship a strike creates for everyone -- our customers, suppliers, employees, community and our company -- and we look forward to having our entire team back."

In its own statement, the International Association of Machinists and Aerospace Workers (IAM) said that the agreement reached with Boeing will provide job security for its members and limit the amount of work outside vendors can perform in the workplace.

It said that the agreement was hammered out over a five-day period with assistance from federal mediators and participation at the bargaining table by IAM International President Tom Buffenbarger and IAM General Vice President Rich Michalski. 

Job security and the use of suppliers were key issues in the strike that began on 6 September, 2008. Among the other issues resolved in the latest round of bargaining were wage rates, health care benefits for current and future employees, pension improvements and work rule changes designed to improve productivity.

IAM's statement said that the full details of the 4-year accord would be withheld until they can be compiled and distributed to IAM members in all Boeing locations. It also said that the tentative agreement has the unanimous endorsement of the IAM negotiating committee and will be presented to members for a ratification vote, which will take place in 3-5 days. 

''This tentative agreement is the result of hard work and great sacrifice by many people,'' said IAM Aerospace Coordinator Mark Blondin. 

''But no one deserves more credit than the workers at Boeing, who conducted themselves with dignity and determination throughout this ordeal. On behalf of the entire negotiating committee, I want to say it has been our honor to serve as their representatives.''

Reports in the media suggested that the key points of the preliminary settlement include agreements the union had sought on job protection, no increase in employee health-care costs and a four-year contract, in lieu of the usual three year one. 

Also, for the first three years workers get the 11 per cent pay hike Boeing had offered, with a four per cent raise in the fourth year. The IAM had proposed 13 per cent for the first three years.

Reports suggest that the deal negotiated would save around 2,200 facilities and maintenance positions, while extending job protection for another 2,900 workers. The agreement also offers bonuses of $5,000 or 10 per cent of the previous year's earnings, whichever is greater, in the first year, and then $1,500 in each of the second and third years for workers. 

Boeing's earlier offer had provided an average bonus of $6,400 this year.

The strike is likely to impact Boeing's fourth quarter's earnings, as well as the deliveries of the 787 Dreamliner. Boeing has said that it will issue an update to its guidance once the strike is settled.

Since the beginning of the strike, Boeing shares have fallen 32.8 per cent, while the S&P 500 has fallen 31.3 per cent at the same time.

If IAM members vote to ratify the deal and thereafter start working again next week, it would end the longest strike at Boeing in over a decade. The previous longest strike by the union spanned 28 days in 2005 and 69 days in 1995.

Shares of Boeing's suppliers, who had been impacted by the strike, too buoyed after news of the breakthrough in talks came out. Shares of Spirit AeroSystems Holdings Inc, a former unit of Boeing that manufactures fuselage and wing parts rose six per cent, while those of carbon-composite provider Hexcel Corp gained 19 per cent. The stock of titanium producer RTI International Metals Inc went up 29 per cent.

Recent signs from both the union and the company were that of bringing the strike to an end. Reports quoted unnamed Wall Street analysts as estimating that Boeing was bleeding $100 million in revenue for each day of plant closures, while simultaneously striking workers were losing their usual health-care benefits after one month on strike, are were getting a frugal sustenance of $150 per week as strike pay from the union.

Boeing's next challenge at hand is to avoid a similar scenario with the the Society of Professional Engineering Employees in Aerospace (SPEEA), which represents over 20,000 white-collar engineering workers. On its website, SPEEA said that negotiations would start with Boeing on Wednesday.