Oct. 13 (Bloomberg) -- Boeing Co. and its machinists union failed to settle a strike over job security and ended a new round of talks that began over the weekend, keeping aircraft factories idle for a fifth week.

The work stoppage is costing Chicago-based Boeing more than $100 million in lost revenue a day since the company usually gets paid upon delivery, analysts say. The strike is also further delaying the new 787 Dreamliner, which is already at least 15 months behind schedule and was supposed to fly for the first time next month.

Job security is the main conflict between Boeing and the International Association of Machinists and Aerospace Workers. Along with a higher compensation package than Boeing had offered, the union wants to take back some work being done by outside vendors and have a chance to bid for more projects in the future.

``We worked very hard to find solutions, and we are extremely disappointed that the talks broke off,'' Doug Kight, Boeing's lead negotiator, said in an e-mailed statement today. ``We want to resolve this strike so employees can return to work, but we cannot sacrifice our ability to continuously improve productivity and our long-term competitiveness for an agreement.''

Boeing says outsourcing is an integral part of its business strategy and that any improvements to wages and benefits must be sustainable as competition increases. No new meetings have been scheduled.

No Common Ground

The talks failed before the two sides got to compensation matters, Mark Blondin, the union's lead negotiator, said in an interview.

``We agreed from the start that job security was the top issue and we needed to work to find common ground,'' Blondin said. ``We were unable to do that, and the mediator saw that and ended the meeting.''

Boeing, second only to Airbus SAS in commercial planemaking, and the union sat down with a federal mediator over the weekend to try to end the strike, which began Sept. 6 after 80 percent of union voters rejected the company's offer.

``Boeing made it clear that they wanted vendors, subcontractors and suppliers to perform the work our members do and that our members weren't in their future plans'' for the delivery of parts and materials or inventory jobs in the factories, Blondin said. ``Flexibility and competitiveness is one thing, but when the company says that means it can eliminate jobs, this union can not agree with that.''

Pay Offer Falls Short

Boeing's 11 percent raise offer over three years fell short of union demands, and workers rejected the company's plan to have them shoulder more of their health-care costs. The IAM says the 27,000 workers it represents in Washington state, Oregon and Kansas deserve a bigger share of Boeing's profits as airlines have placed record orders for new jets that use less fuel.

The IAM has stopped work over three of the last six contracts before this one, in strikes lasting four to 10 weeks.

Boeing Chief Financial Officer James Bell said last month that this walkout would hurt earnings more than the last one in 2005 because production and profit margins are both higher. The 28-day walkout that year shaved $300 million off second-half profit.

Boeing faces the additional threat of a strike by its 21,000 engineers, who have likewise listed outsourcing as a chief complaint. Final talks with the Society of Professional Engineering Employees in Aerospace begin Oct. 28.

To contact the reporter on this story: Susanna Ray in Seattle at sray7@bloomberg.net.

Last Updated: October 13, 2008 21:49 EDT