Boeing Co. (NYSE: BA) and its engineering union have come to terms on a contract. This is good news for Boeing and its workers. Boeing can continue designing aircraft and its engineers can enjoy a raise. Considering the economic climate in which this contract was negotiated, it is a testimony to Boeing's financial prospects that it was able to increase their pay. With a $276 billion backlog, Boeing could be among the healthiest companies around.

What are the terms of the deal? Boeing employs 20,500 Society of Professional Engineering Employees in Aerospace (SPEEA) workers who are well paid already: 13,900 Boeing engineers average $88,000 annually and 6,600 technical workers make $67,000. The new contract offers 5% annual raises, higher pension payments and overtime rates, and gives workers more input concerning outsourcing decisions. But SPEEA members will pay $200 a year more for improved health care.

While this contract settlement is good news, it is less critical to Boeing's operations than the 52-day strike it settled last month with Boeing's machinists that cost $10 million a day. That's because the machinists were building aircraft before they went on strike, whereas the engineers are largely designing future ones. Nevertheless, both SPEEA and the machinists agreed to four year contracts -- a year longer than usual. This means that Boeing can now get back to work satisfying the prodigious demand for its products.