Aug. 29 (Bloomberg) -- Boeing Co.'s largest union urged members to reject the planemaker's contract offer next week and walk off the job in a strike that would shut down production and may further delay the 787 Dreamliner.

The International Association of Machinists and Aerospace Workers also filed unfair-labor practice charges against Boeing with the National Labor Relations Board for ``direct dealing with our members,'' spokeswoman Connie Kelliher said today near Seattle, the company's manufacturing hub. Managers met one-on-one with workers ``to enhance their own bargaining position, undermine the union and intimidate our members.''

Boeing, seeking more open communication with the 27,000 machinists, posted full proposal terms online during talks instead of letting union leaders present details to members themselves as usual. Boeing cut off bargaining yesterday, six days before the current contract expires Sept. 3, saying it wanted to give workers time to study the package before voting. It included an 11 percent jump in base pay over three years.

``We're extremely disappointed that the union is recommending that our employees reject what adds up to the best contract in the aerospace industry,'' company spokesman Tim Healy said. ``We hope our employees recognize the value of this offer. It is our best and final.''

A walkout this year, which would come Sept. 4 amid a record order backlog and efforts to get Dreamliner production back on track, may cost Chicago-based Boeing $120 million a day in lost revenue, Jefferies & Co. analyst Howard Rubel estimates. A strike also might keep Boeing from reclaiming the position of world's largest planemaker from Airbus SAS, the Toulouse, France-based rival that's built more planes annually since 2003.

Strike History

The union's members in Washington state, Oregon and Kansas have followed leaders' voting recommendation in three of the last four negotiations, stopping work over two of them to gain contract improvements. The most recent walkout shaved $300 million from Boeing's second-half earnings in 2005.

The union says workers deserve more of Boeing's record profits in the three years since the last contract was signed. If more than two-thirds reject Boeing's proposal, the workers will walk out again Sept. 4.

``All our members want is a little bit of the pie they've helped create,'' Tom Wroblewski, president of the IAM's District 751 in Seattle, said at a press conference today. ``The offer fell short in job security'' as well as health care, wages, time off, pensions, profit-sharing and other issues, he said.

Mediator `Welcome'

The union ``would welcome the help of a federal mediator'' to bring Boeing back to the table before Sept. 3 for further negotiations, Wroblewski said.

Boeing, the world's No. 2 commercial-plane maker and defense contractor, fell 78 cents to $65.56 at 4 p.m. in New York Stock Exchange trading. The stock price has declined 35 percent since October, when the first of three Dreamliner delays was announced because of parts shortages and problems with suppliers.

Boeing, which still needs to make about 160 planes by year- end to meet its aircraft-deliveries goal, has $275 billion worth of plane orders that would take machinists eight years to build. Still, the company has said it needs to make sure any contract improvements are sustainable. Some airlines have canceled or deferred deliveries because of record oil prices.

The final offer presented yesterday provides a combined raise of 11 percent that would be the biggest since the one of the same amount won in the 1999 contract. The union sought an increase at the top end of the 9 percent to 13 percent three-year range it's won recently for other aerospace companies. Workers also would get a $2,500 payment if they approve the accord by Sept. 3, plus other bonuses.

Terms of Offer

The plan would preserve the way Boeing uses contractors, rejecting changes the IAM sought and had warned it would be willing to strike over.

The total average annual value of the contract would be $110,400, 23 percent greater than the typical machinist's average compensation now, including overtime, bonuses and benefits, according to Healy. The average machinist's wage is about $26 an hour now, or about $54,000 a year.

Boeing dropped most plans the union had termed ``strike issues,'' including proposals to negotiate a separate contract for the 700 machinists in Wichita, Kansas; to give new workers a 401(k)-style retirement plan instead of the traditional defined- benefit pension; and to cut medical coverage for early retirees.

``Boeing is gambling that their concessions are appealing to enough of the workforce to keep a strike from happening, but job security is a sticking point for a lot of them,'' Richard Aboulafia, an analyst with Teal Group in Fairfax, Virginia, said today. ``There is no question that union management feels as though the company is working around them.''

At a press conference yesterday, lead company negotiator Doug Kight said Boeing had ``not gone around the union.''

``As leaders it is not only our right but our obligation to talk to the employees, owners of the company, about our business,'' Kight said.

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

Last Updated: August 29, 2008 19:51 EDT