PITTSBURGH (AP) _ Boeing Co.'s machinists union plans to issue a recommendation to its members Friday about a proposed labor contract the aerospace company calls its "best and final" offer.

The Chicago-based company hopes the proposal, which provides added pay and incentives to workers over three years, helps it avoid a strike. The talks come as Boeing tries to keep up with a backlog of plane orders and avoid more penalties caused by production delays of its next-generation passenger jet.

Shares of Boeing fell $1.03 cents, or about 1.6 percent, to $65.31, in midday trade.

The two sides have been negotiating over a new 3-year contract since May 9 and began round-the-clock talks at a Seattle airport on Aug. 21. In 2005, about 18,400 machinists in the Seattle area, Wichita, Kansas, and the Portland, Oregon, area struck for four weeks, forcing the company to halt production of commercial airplanes. The machinists assemble Boeing's commercial planes and some key components.

Union representatives have been poring over the 300-page contract proposal since it was delivered by Boeing on Thursday. The company said the offer increases pay by 11 percent on average over three years for more than 27,000 union workers in Washington state, Kansas and Oregon.

The tentative deal also includes a $2,500 bonus for workers if the agreement is ratified by Wednesday, when the current contract expires and a union vote is scheduled.

Boeing said it had withdrawn certain contentious proposals, such as plans to cut early retiree medical coverage and create a new defined-contribution retirement program for future employees.

The union held a preliminary vote to authorize a strike in July. On Wednesday, members will cast two ballots: one to accept or reject Boeing's latest offer and a second on whether to launch a strike. A vote supporting the strike would trigger a work stoppage at 12:01 a.m. Thursday.

Analysts say a strike could cost Boeing about $100 million per day in deferred revenue.

Boeing's latest offer came after the company received a counterproposal from the union, which asked for more money and stronger language about job security.

Besides the proposed wage hikes, the offer includes pension increases and a 3 percent cost-of-living adjustment. The added pay and benefits would total an average $34,000 over the life of the contract.

The average Boeing machinist earns $27 an hour, or about $56,000 a year, before overtime and incentives.

In its prior offer earlier this week, Boeing had bumped a proposed wage increase to 9 percent over three years and raised the basic pension benefit. It also included a yearly 3 percent cost-of-living adjustment.

The union currently represents 25,000 Boeing employees in the Seattle area, around 1,500 in Portland and 750 in Wichita.

Boeing's commercial airplane manufacturing operation, based in the Seattle area, has led a resurgence by the company over the past two years amid heavy orders for the much-awaited and increasingly delayed 787.

But Boeing faces billions of dollars in anticipated additional costs and penalties, with three delays in the 787's delivery schedule that leave it more than a year behind the original schedule.

Airlines, meanwhile, have been struggling with rising fuel costs. Several carriers have posted big losses in recent months and some have been forced to postpone aircraft deliveries.

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