NEW YORK (CNN/Money) - Boeing Co. made a final offer Tuesday to the union representing 25,000 of its workers, a step that is expected to fall short and lead to a Labor Day strike.

The International Association of Machinists says that its members are overwhelmingly opposed to management's previous offer due to its lack of job security. A final offer inserted some new language on job security, but not the provisions that the union sought tying employment levels to aircraft deliveries or revenue.

Boeing's machinists are apparently set to walk off the job Monday without job guarantees the company says are impossible.

The final offer upped the proposed signing bonus to 8 percent of pay from the previous offer of 6 percent, and pay increases of 2 percent in the second year of the contract and 2.5 percent in the third year. The offer also increased the pension benefit to $60 per month per year of service by the employee from the previous offer of $58 and the current level of $50.

"We think it reflects a very fair and very competitive contract offer going forward," said Alan Mulally, CEO of Boeing's commercial airplanes unit, at a press conference Tuesday afternoon. He said he was still hopeful that rank and file would agree to the three-year offer.

The union negotiating committee issued a statement to members which said it unanimously recommended rejecting the company's offer because it did not meet members' key demands for job security, pension and low-cost health care.

"This company has demonstrated a total disregard for you, the workers who built the Boeing Co., and instead are more interested in stuffing their pockets at the expense of you and your families," said the union statement.

The final offer is to be put to members for a vote Thursday, likely to be followed by a strike vote. If the contract does not receive support of a majority of those voting, then two-thirds approval would be needed to authorize a strike. But members have shown a willingness to take that step, with the overwhelming majority of current members having struck the world's largest aircraft maker in 1989 and 1994.

The average IAM member earns base pay of about $54,000 a year, but union spokesman Matt Bates said pay is not the key concern this time; instead, it is job security and improved pensions, a key concern for employees, whose average age tops 47.

"The offer goes backwards on job security, which renders the few favorable parts of the offer moot," he said, speaking of the company's previous offer. The union said that there 49,300 members when the last contract was signed in 1999; company officials put that figure at about 44,000, still well above current 25,000 level.

"This is not a post-9/11 phenomena," said Bates. "If they keep up the pace of downsizing since 1990, there won't be many people here to enjoy any other provisions of the contract."

Bates said about 10,000 members have been laid off since the Sept. 11 attacks led to a sharp drop in demand for new aircraft, particularly by U.S. airlines. Company officials say 18,425 union members have been notified of layoffs since the attack, although many of those are still at work at the current time.

The union is seeking employment level guarantees based on the number of planes delivered or revenue for the company's core commercial aircraft unit. The company says that it can't give even those guarantees in the current market environment, and that it is better for the affected employees to no longer have the cycle of layoff and recall. Mulally said Tuesday that the company can't offer the guarantees the union is seeking in the face of market forces.

"Every year, year after year, we need to continue to improve our quality and competitiveness," he said. "To try to guarantee jobs when the airlines don't guarantee they'll pick Boeing is impossible. To me the most important thing about jobs security is every year we keep improving our quality and productivity."

Analysts believe that a strike is definitely going to happen, but say that the impact of a strike has already been priced into Boeing's stock price. Shares of Boeing (BA: Research, Estimates), a component of the Dow Jones industrial average, closed Tuesday up 14 cents at $37.03.

"This strike could last through November/December 2002," said a note to clients by Byron Callan Merrill Lynch & Co. aerospace analyst, who has a "strong buy" rating on the stock. "In prior years, Boeing's stock price has tended to trade more in line with broader expectations for its business outlook than with short-term issues related to a strike, such as changes to aircraft delivery schedule."

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The strike would likely not cause many immediate problems for the company's customers, who have been cutting their demand for new aircraft. The company said 28 orders or options on new aircraft have been cancelled so far this year, and the forecast for 2002 deliveries has fallen to about 380 from the projection of between 510 and 520 in the months before the attack. A further decline in deliveries to between 275 and 300 deliveries is seen in 2003.

Some of the planes due to be delivered this fall will replace planes that airlines are grounding, rather than meeting increased demands. In fact the major U.S. airlines have all announced plans to cut capacity this fall.

But Mulally pointed out that only 25 percent of Boeing's production goes to U.S. carriers, and that demand had bounced back better in Asia and some other markets. He said it is important the company does fulfills its commitments to airlines, particularly at this difficult time for the industry.

"A strike is never good for anybody. It fundamentally lets our customers down," he said. "The reality is that the airplanes we've committed to the airlines are the ones that they want."

The company managed to hit its 2001 revenue forecast of $58 billion in 2001, but revenue for this year, which was supposed to increase to $62 billion, are now projected to fall to $54 billion. That could fall further, along with profitability, if there is a strike.

Analysts surveyed by earnings tracker First Call forecast earnings per share of 67 cents in the current quarter, down from 88 cents a share a year ago, and down from a forecast of 73 cents as recently as this spring, before the start of contract talks. Fourth-quarter EPS is seen falling to 81 cents from 90 cents a year earlier.