Aug. 27 (Bloomberg) -- Boeing Co., in the last week of talks with its largest union before a three-year labor contract expires, is betting a direct appeal and early final offer will persuade the machinists not to strike.

The world's second-largest commercial planemaker last week for the first time put its full initial contract proposal on the Web, along with a blog and audio of radio ads aimed at the 27,000 machinists. Chicago-based Boeing updated the offer yesterday and plans to issue a final one by Aug. 29, giving workers extra time to study it before a Sept. 3 vote. In typical talks, union leaders would present details of a proposal to members.

``Boeing is communicating differently this time, and I bet it's driving the union crazy,'' said Howard Rubel, a New York- based analyst with Jefferies & Co. ``But in this age of the Internet, why not put it all out there on the Web site? This gives the rank-and-file more time to absorb and decide, rather than being given the cram-down at the last moment.''

The strategy may backfire by angering employees who focus on the company's early, lower offers and inciting them to walk off the job next week, said union leader Thomas Wroblewski. A strike would shut down Boeing's manufacturing base in Seattle and cost $120 million a day in lost revenue, Rubel said. It may also further delay Boeing's new 787 Dreamliner.

Boeing has ``shot itself in the foot'' by involving workers in the give-and-take of early talks rather than letting labor leaders sell a negotiated -- and better -- deal to them, said Wroblewski, president of Seattle's District 751 for the International Association of Machinists and Aerospace Workers.

Union Demands

Boeing, also the second-biggest U.S. defense contractor, offered last week to boost machinists' annual compensation by about $24,000, including a bonus and increases in wages and pension payments. The company raised the offer yesterday to an estimated $28,000 increase. Average compensation is about $91,500 a year now, including overtime and other payments and benefits.

The IAM, representing machinists in Washington, Oregon and Kansas who make up about 17 percent of the company's global workforce, rejected the offer. The union says workers deserve more of Boeing's record profits since the last contract was signed in 2005 and that it wants more job security.

Wroblewski has declined to give specifics of the group's counteroffers in the process, saying he negotiates ``at the table, not through the media.''

Early Talks

Leadership has changed on both sides since a 28-day strike after the 2005 talks. It's the first time either Wroblewski or top company negotiator Doug Kight have headed up the table. Boeing Commercial Airplanes Chief Executive Officer Scott Carson and the IAM's national aerospace coordinator, Mark Blondin, are in new positions as well.

The groups began talks in May, 45 days earlier than usual, in an attempt to avoid strikes that plagued three of the past six contract negotiations and almost a fourth. Workers in 2002 rejected the contract but not by a big enough margin to walk out.

``We have a poor history of labor relations with the IAM, so we figured we'd better do something different this time around,'' Boeing spokesman Tim Healy said. The company started its special negotiations Web site in May, including a blog written by Kight, and has been putting its offers online within hours of presenting them to union leaders.

``We don't think the way it's been done in the past, where employees find out at the last minute what the offer is and then have to vote on it, is what they want,'' Healy said.

The open communication during negotiations is a risky move, said Gary Chaison, a labor-relations professor at Clark University in Worcester, Massachusetts.

Risks to Decision

``I have never heard of it being done,'' Chaison said. ``The Internet provides a wonderful means of communicating with the workforce. But where employees have selected a representative to deal with management, they might tend to resent a move to go around them.''

Demonstrations also started early this time, with machinists marching through plants every Wednesday for the past month. Workers chanted ``Strike! Strike!'' in an Aug. 24 rally near the Seattle-area hotel where the teams are holding round- the-clock talks.

Boeing's order backlog is at a record $275 billion that would take machinists eight years to build. Boeing shares have declined 36 percent since the first of three 787 Dreamliner delays was announced in October. The stock rose $1.06 to $64.52 at 4:15 p.m. in New York Stock Exchange composite trading.

Union members know the company can't afford a strike and are ``feeling a high degree of solidarity'' that will be tough for Boeing to match, said David Olson, professor emeritus of political science at the University of Washington in Seattle who has studied Boeing for 40 years.

``I can go back to the 1930s and show similar patterns -- when the union is in a strategically strong position, the employers attempt to dilute the power of the union leadership and go around them by appealing directly to the employees,'' Olson said. ``This tactic rarely succeeds, because workers know what kind of position they're in.''

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

Last Updated: August 27, 2008 16:38 EDT