March 5 (Reuters) - Boeing ( BA ) and its largest union

open talks on Friday seeking the first new contract in 16 years

as the U.S. planemaker grapples with its ongoing 737 MAX safety

crisis and after big gains by workers in other sectors of the

economy.

U.S. unions have capitalized on tight labor markets to win

hefty contracts at the bargaining table, with mainline pilots,

autoworkers and others scoring big raises in 2023.

Unlike auto workers who were able to leverage strong

industry profits, Boeing ( BA ) is losing ground to rival Airbus

and trying to manage a crisis that erupted after a door

plug blew off an Alaska Airlines 737 MAX jet in mid-air on Jan.

5. Boeing ( BA ) reported a net loss of $2.2 billion in 2023 after

losing $5 billion in 2022.

The International Association of Machinists and Aerospace

Workers (IAM), which represents over 30,000 Washington state

workers building Boeing's ( BA ) 737 MAX jets, wants better retirement

benefits and wage increases exceeding 40% over three to four

years after what it termed years of stagnant earnings.

"We have a lot to make up for," said Jon Holden, president

of the IAM's District 751 representing the Seattle-area workers.

Workers are scheduled to vote for a strike authorization

mandate on July 17, but could not strike before the contract

expires on Sept 12.

Workers ratified a contract in 2008 and approved two

extensions in 2011 in 2014. The current eight-year extension

began in 2016.

Boeing ( BA ) said in a statement on Tuesday that it is "confident

we can reach a deal that addresses the needs of our employees

while allowing us to win new business in a very competitive

global market."

A labor deal must be able to "balance the needs of both our

employees and the union with our desire to maintain a structure

that allows us to continue to win new business in the market,"

said a Boeing ( BA ) official who spoke on condition of anonymity due

to the sensitivity of the talks.

The official said that over the last decade, worker

take-home pay has kept pace with inflation, as the contract

stipulates yearly cost-of-living adjustments.

Holden, however, said members earned four 1% wage increases

over the last eight years and agreed to a pension freeze in 2014

in prior negotiations, a struggle for workers dealing with high

inflation.

"When you look at the impact on inflation and the rise in

the cost of housing and groceries and everything that working

people need, we're seeing a lot of momentum to increase pay," he

said.

LIKELY STRIKE

Analysts said a strike is likely given union leverage and

worker disappointment with the terms of the 2014 extension and

as U.S. aviation regulators have curbed Boeing's ( BA )

production as they scrutinize safety processes at the

planemaker.

"The IAM has a lot of leverage at this juncture given the

various production and quality issues," said David Nolletti, New

York-based head of the aerospace practice at consultancy

Riveron. He said a strike was likely unless management "largely

concedes to their demands."

Workers could also tap political support. President Joe

Biden considers support for labor a cornerstone of his economic

policies, having visited picket lines for the auto workers last

year.