Dec. 2 (Bloomberg) -- Boeing Co.'s biggest engineers' union voted to accept a new three-year labor agreement that boosts pay and preserves health-care benefits, helping the company avoid a strike and keep its 787 model aircraft program on schedule.

Members of the Society of Professional Engineering Employees in Aerospace voted 89.5 percent in favor of the contract, the Chicago-based company said in a statement today. Wages increase 17 percent for the engineers and 15 percent for technical workers. Most of the 18,000 members work in the Seattle area.

The agreement allows work to continue on the more fuel- efficient 787 Dreamliner model, a key part of Chief Executive James McNerney's strategy to regain the top ranking in commercial-jet deliveries from Airbus SAS by 2008. McNerney settled a strike by 19,000 machinists in record time in September, helping to avoid the loss of aircraft orders.

About 800 engineers and technical workers who work at Boeing's defense business in Wichita, Kansas, will vote Dec. 5 on a separate labor agreement. Union leaders recommended workers reject it, saying the contract offers less than the Seattle engineers' contract. No talks are scheduled in a monthlong strike by 1,500 machinists at Boeing's rocket business.

Shares of Boeing rose $1.48, or 2.2 percent, to $69.67 in New York Stock Exchange composite trading yesterday. They have risen 35 percent this year.

Pension Contribution

The average salary for a Boeing engineer will increase to at least $95,884 a year over three years, while the average technical employee's pay will rise to at least $71,134. Salaries will be reviewed in 2007 and 2008 to make sure they are competitive with the industry, the union said.

Employee health-care costs will remain at current levels and some company-paid medical coverage will be increased in one of Boeing's two health plans. It also would boost monthly pension payments by 17 percent to $70 a month for every year of employment and increase the company's 401(k) savings match to 75 percent from 50 percent, Boeing said.

The new contract also lets engineers participate in a program that awards bonuses based on company performance. Only non-union employees had been able to join the program, which may provide as much as 20 days' extra pay, Boeing said.

Boeing engineers design aircraft and aerospace systems, implement production, oversee manufacturing, certify work and provide customer support. Technical employees include designers, planners, drafters and programmers.

In 2000, Boeing engineers staged one of the largest white- collar walkouts in U.S. history. The 40-day strike led to a drop of as much as 32 percent in Boeing's stock.

To contact the reporter on this story: James Gunsalus in New York at jgunsalus@bloomberg.net

Last Updated: December 2, 2005 07:40 EST