NEW YORK/EVERETT, Washington, Sept 6 (Reuters) - Boeing Co's (BA.N) 27,000-strong machinists' union walked off the job on Saturday after the plane maker failed to improve its contract offer after two days of emergency talks.
At midnight, a crowd of more than 100 employees gathered near the entrance of Boeing's factory in Everett, Washington, whistling, honking and waving picket signs as the strike got underway. A small police presence ensured the scene was calm.
"Despite meeting late into the night and throughout the day, continued contract talks with the Boeing Company did not address our issues," Tom Wroblewski, the IAM's Seattle-area president, said in a letter to members. "The strike is on."
The vast majority of the International Association of Machinists and Aerospace Workers' (IAM) members voted to reject Boeing's "best and final" offer on Wednesday, but postponed a strike for 48 hours to give negotiators more time.
Boeing and IAM negotiators, along with federal mediators, met near Orlando, Florida in a last-ditch effort to hammer out an agreement.
"Over the past two days, Boeing, the union and the federal mediator worked hard in pursuing ... options that could lead to an agreement. Unfortunately the differences were too great to close," said Scott Carson, the head of Boeing's commercial plane unit, in a statement.
No further talks are scheduled. Both sides said they were waiting for the other to make the first move. Boeing spokesman Tim Healy said the company was "open" to hearing from the IAM.
"If this company wants to talk, they have my number, they can reach me on the picket line," the IAM's Wroblewski said in a message to union members.
Union volunteers rolled out 52-gallon oil drums -- known as "burn barrels" -- and readied coffee and soup to keep expected picketers warm at the company's Everett, Washington plant, despite the balmy late summer weather.
"It could be a couple of days or three months. It depends on whether the company wants them to go back to work," said Ed Zvonik, a 30-year Boeing veteran, when asked how long the strike might last.
The strike started officially for most of the union members at midnight Seattle time, which is when the previous three-year contract expired. The bulk of Boeing's machinists work at plants around the Puget Sound area.
Boeing said it would keep its plants open, with workers in other unions and non-union employees expected to come to work, but production lines at its massive facilities in Everett and Renton, Washington, would stop.
The company plans to deliver planes that had already come off production lines, but will not do any more work on assembling aircraft. Airlines tend to be wary of planes not produced by regular skilled workers.
That means there will be no further production of its 737, 747, 767 and 777 planes, and that its already delayed 787 Dreamliner will fall even further behind schedule.
Boeing spokesman Healy said a "protracted" strike could mean Boeing would miss its target of making the first 787 test flight in the fourth quarter. The plane was originally supposed to fly last summer, but has been derailed by a series of production problems.
"They took a swing with a baseball bat at a bee hive and got stung. They didn't realize how strong we were," said Dale Flinn, 53, a Boeing door mechanic.
Boeing, which made a $4.1 billion profit last year and has a record $275 billion worth of commercial plane orders in its books, could financially survive a short work stoppage. The strike will cost Boeing about $100 million in revenue per day and knock about 1 cent per day off earnings per share, according to Wall Street analysts.
The walk-out by the IAM is the fourth at Boeing in 20 years. The union struck for 48 days in 1989, 69 days in 1995 and 28 days in 2005. In 2002, a contract was adopted by default, as it was rejected by workers but fewer than two-thirds approved a strike.
Boeing's "best and final" contract offer this time around was delivered to union members a week ago, proposing an 11 percent wage increase over the three-year life of the contract, a one-time lump sum and ratification bonus, and other incentives that the company said would add about $34,000 to the pay of the average machinist, who now makes about $65,000 a year including overtime.
That failed to meet union demands for a 13 percent wage increase, no change to health-care contributions and the roll-back of provisions allowing Boeing to outsource work.
"The company's contract is like Swiss cheese. It's full of holes," said Marnie Young, a landing gear mechanic on Boeing's 777, who had homemade Minnie Mouse ears on her head. (Reporting by Bill Rigby in New York and Laura Myers in Everett, Washington and Daisuke Wakabayashi in Seattle; Editing by Clarence Fernandez)