UPDATE 1-Boeing machinists walk off the job as talks fail

(Adds comment from picketer)

By Bill Rigby and Daisuke Wakabayashi

NEW YORK/EVERETT, Washington, Sept 6 (Reuters) - Boeing Co's (BA.N: Quote, Profile, Research, Stock Buzz) 27,000-strong machinists' union walked off the job on Saturday after the plane maker failed to improve its contract offer following two days of emergency talks.

"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 international union's Seattle-area president, said in a letter to members. "The strike is on."

The walkout means there will be no further production of Boeing's 737, 747, 767 and 777 planes, and that its already delayed 787 Dreamliner will fall even further behind schedule.

By midday on Saturday, a couple dozen people had gathered near the gates of Boeing's factory in Everett, Washington, calmly waving picket signs at drivers who would honk or shout support.

Union members said they expect a bigger showing on the picket lines on Monday without the distraction of a sunny weekend.

The vast majority of the International Association of Machinists and Aerospace Workers' 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 end disagreements over wage increases, health care contributions and the company's outsourcing policy.

"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," Scott Carson, head of Boeing's commercial plane unit, said 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," Wroblewski said in a message to union members.

PLANTS REMAIN OPEN

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.

"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.

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.  Continued...