NEW YORK (CNN/Money) - A strike at Boeing Co. was averted at the eleventh hour Friday in a contentious split vote by union members at the world's largest aircraft maker.

Just before members were due to walk out at a Boeing plant in Wichita, Kans. at 12:01 a.m. CDT Saturday, the union announced that while 62 percent of rank and file members of the International Association of Machinists voted against Boeing's contract offer, only 61 percent voted to authorize a strike, falling short of the two-thirds majority necessary under union bylaws.

Boeing employee Carl Shelton casts his vote at the IAM union hall in Seattle Friday.

The announcement was greeted by boos and catcalls by union members, but the vote means that the unpopular offer is accepted by default.

"The union is a democratic organization. Our members felt they could not strike the Boeing Co. at this time," said Mark Blondin, president of District 751 of the union which represents the 25,000 IAM members at Boeing. "As you know, Boeing used scare tactics."

Boeing officials had said their offer would get worse if the union was struck. Alan Mulally, CEO of Boeing's Commercial Airplanes unit, said he was pleased by the vote despite the split result.

"We're very pleased we have a new three-year contract with the IAM. We're looking so forward to getting back to building airplanes," he said. Asked about the rejection of the offer by members, Mulally termed that a reaction to the turmoil in the industry, including Boeing's cut of 30,000 jobs and more than half its production in the wake of the downturn in demand for air travel and new aircraft since the Sept. 11 terrorist attack.

Alan Mulally, CEO of Boeing's Commercial Airplane unit.

"I hear a really clear message that we have a lot of people disappointed in where our industry is," he said. "We've all had friends who are leaving Boeing. I think we all have same feelings, we're real live people who love working here and hate seeing our industry turned upside down."

The union's negotiating committee had urged members to reject the Aug. 27 offer from the company and authorize a strike, saying it did not provide the necessary job guarantees. The union had sought to tie employment levels at Boeing to either revenue levels or aircraft deliveries.

Company officials insisted they couldn't grant the job guarantees because of weak demand for aircraft in the wake of the Sept. 11 terrorist attack as well as competition from European competitor Airbus Industrie.

"Nobody can guarantee jobs and security in a market based economy," Mulally said late Friday after the vote was announced. "The only job security we have it to make airplanes our customers prefer and make them more efficiently than anyone else." But he denied union charges that the company wants to shift more production overseas and to outside contractors elsewhere in the country.

"We're absolutely committed to the communities in which we operate," he said.

The agreement gives members an 8 percent signing bonus and pay increases of 2 percent in the second year of the contract and 2.5 percent in the third year. The average base pay of an IAM member at Boeing is $54,000. The offer also increased the pension benefit to $60 per month per year of service by the employee.

Boeing was hit by one strike early Saturday, but it didn't affect its commercial jet production. About 1,400 members of the United Aerospace Workers union at a plant in Ridley Township, Pennsylvania, outside of Philadelphia, voted 98 percent in favor of a strike. The plant makes Chinook helicopters and V-22 Osprey tilt-rotor aircraft.

"With (the IAM vote), they left us as the only Boeing union willing to take on the company in the fight to maintain benefits, wages and seniority issues," said a statement on the union's Web site. "We know that we are small in numbers compared to them, but our hearts are strong."

Analysts were widely expecting IAM membership to reject the offer and go on strike. Shares of Boeing (BA: Research, Estimates), a component of the Dow Jones industrial average, closed down 87 cents to $35.58 in Friday trading.