Boeing, union negotiators set to resume contract talks on Wednesday

(Reuters) -Boeing and its largest union will resume contract talks on Wednesday, in the presence of federal mediators, after failing to agree on key issues of wages and pensions on Tuesday, the International Association of Machinists and Aerospace Workers (IAM) said.

Boeing (NYSE:BA) and the U.S. Federal Mediation & Conciliation Service did not immediately respond to an email seeking comment.

Last week, 94.6% of IAM’s more-than-30,000 members, including workers who produce Boeing’s top-selling 737 MAX and other jets in the Seattle and Portland areas, rejected Boeing’s offer and 96% favored a strike.

The rejected four-year deal included a general wage increase of 25%, far lower than the 40% workers had demanded. Boeing had also offered a commitment to build its next commercial airplane in the Seattle area.

A long strike could further damage Boeing’s finances, already groaning due to a $60 billion debt pile.

The planemaker needs to generate sufficient cash flow to meet debt payments. A strike also would weigh on airlines that fly Boeing jets and suppliers that manufacture parts.