Washington - Machinists at airplane giant Boeing went on strike Saturday after rejecting the company's proposed wage increases amid fears that their jobs could be shipped overseas.

The machinists, members of the International Machinists and Aerospace Workers, approved the strike action in a vote taken last Wednesday. But they delayed implementing the strike after the company reopened negotiations with union leaders, who gave Boeing until Friday evening to provide an "exceptional contract offer" under the guidance of a federal mediator.

The union covers nearly 27,000 employees mainly in the states of Washington, Oregon and Kansas, who make parts and assemble planes for Chicago-based Boeing.

"Despite meeting late into the night and throughout the day, continued contract talks with the Boeing company did not address our issues," a statement from the union said.

Boeing President and CEO Scott Carson said: "Over the past two days, Boeing, the union and the federal mediator worked hard in pursuing good-faith explorations of options that could lead to an agreement. Unfortunately the differences were too great to close."

The company said that despite the strike, its operations in Washington, Oregon and Kansas would remain open and that employees who were not represented by the union were expected to report for work.

Boeing's contract offer included a signing bonus of 2,500 dollars, an 11 per cent raise over three years with an additional lump sum payment in the first year and a 14 per cent increase to monthly pension plans, among other benefits.

Union leaders said that more than 80 per cent of workers voted for the strike and 87 per cent supported a walkout. They are demanding higher wages and benefits, and assurances that the company will not shift manufacturing jobs overseas.

The dispute comes as Boeing's factories are running at full-tilt to keep up with the strong demand for the fuel-efficient 787 Dreamliner. The company has orders for 900 of the planes, but production is already running two years behind schedule.

Boeing has sold 895 Dreamliners worth about 155 billion dollars. Its rival, the Toulouse, France-based Airbus, has built more jets than Boeing each year since 2003, Bloomberg financial news reported.

A Boeing statement said that during the work stoppage, the company would continue delivering airplanes that were completed prior to the strike and provide customers with spare parts. However, Boeing would not assemble airplanes during the strike. (dpa)