Sept. 3 (Bloomberg) -- Boeing Co.'s largest union rejected a contract and its leaders gave the world's second-largest planemaker 48 hours to improve their offer and avert a strike that might further delay the 787 Dreamliner.

Eighty percent of the voters opposed the three-year contract and 87 percent supported a walkout, the International Association of Machinists and Aerospace Workers said tonight in Seattle. Union leaders Mark Blondin and Tom Wroblewski were shouted off the stage by workers, many already holding `On Strike' signs, who wanted to walk off the job tonight.

``It was our job to negotiate a contract that's acceptable to you, not to negotiate a strike,'' Wroblewski told the crowd. The IAM represents about 27,000 workers in Washington, Oregon and Kansas who make parts and assemble planes for Boeing, which trails only Toulouse, France-based Airbus SAS.

A walkout would threaten to keep the 787, Boeing's most successful new plane, from flying this year and stymie efforts to deliver a record $275 billion in orders as energy prices spur airlines to buy new, more fuel-efficient jets. A 30-day strike this year would reduce Boeing earnings by about 30 cents a share, Macquarie Research Equities analyst Rob Stallard estimates. Howard Rubel, an analyst at Jefferies & Co., predicts a strike may cost $120 million a day in lost revenue.

The most recent walkout lasted 28 days in 2005 and shaved $300 million from Boeing's second-half earnings that year.

Boeing `Disappointed'

Chicago-based Boeing's lead negotiator, Doug Kight, said he was ``disappointed'' by the vote. ``Our job at this point is to listen to the union; we put the last contract offer on the table,'' he said a press conference. ``We will seek to understand and then make an assessment to see if there is a path forward.''

Boeing agreed to federal mediators' request to negotiate another 48 hours, Kight said, adding that he's willing to hear out the union on the ``critical-few issues.''

The company had offered an 11 percent raise over three years, plus bonuses that included $2,500 if the deal had been ratified today by at least half the voters. The company didn't go along with changes the union sought concerning the use of outside contractors for work the machinists have traditionally done.

The job-security issue was enough to convince 21-year machinist Art Schilling to vote to strike. ``We're not asking for the moon; what we're asking for is a fair shake,'' Schilling said today after casting his ballot at the union hall outside Boeing's Renton, Washington, factory, where 737s are built.

Change in Union

One wildcard was a change in the union's demographics since the last contract in 2005, when more than 18,000 workers walked out. Back then, 37 machinists were under age 30. Now there are 2,300 -- about 10 percent of the IAM membership in Boeing's main Seattle manufacturing hub -- because Boeing has recalled laid-off workers and hired new employees.

Boeing's hiring spree since the last contract has cut the average age of machinists to 46 from 49, contributing to a decline in the average wage in the past year by $1 an hour to $26. The company's Aug. 28 final offer would give the average machinist $34,000 in extra pay over three years.

While the average salary is about $54,000 a year, more than 4,000 machinists make less than $30,000, union spokeswoman Connie Kelliher said. The typical Seattle-area machinist starts at $12.72 to $28.22 an hour, which would advance $2.28 an hour under Boeing's offer.

Machinist Pay

The union wants at least a 13 percent wage increase, higher pension payments, no changes to healthcare and the ability to take back some of the work that's being done by outside vendors now, Wroblewski said in an earlier interview. He is president of the IAM's District 751 in Seattle.

The union's members have followed leaders' voting recommendation in three of the last four negotiations before this one, stopping work over two of them to gain contract improvements.

Boeing rose 20 cents to $66.07 at 4 p.m. in New York Stock Exchange composite trading. It has dropped 35 percent since October, when the first of three Dreamliner delays was announced due to parts shortages and incomplete work by suppliers.

Boeing planned to fly the 787 in November and deliver it in next year's third quarter, at least 14 months later than first planned. If the strike exceeds a week, Boeing ``probably would not'' manage to meet the revised schedule, said analyst Paul Nisbet of JSA Research Inc., an aerospace equity analysis firm in Newport, Rhode Island.

Boeing has sold 895 Dreamliners worth about $155 billion, pitching its light weight to airlines as a way to save fuel costs. Airbus SAS, whose main new-plane program, the A380, takes a different approach by putting 525 passengers on a larger aircraft, has built more jets than Boeing every year since 2003.

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

Last Updated: September 4, 2008 02:24 EDT