The Boeing Co. made its first full offer on key economic issues to the Machinists union Friday, providing for an increase in pensions and a general wage increase for each year of a new three-year contract.

"This offer reflects our commitment to rewarding employees for contributing to the company's success while addressing head on the challenges we face in managing long-term costs so that we can continue providing great pay and benefits," Boeing said in a statement. "When the company succeeds we all succeed."

But the union has already said it will not accept several elements contained in the initial offer, including a change in benefits for new hires that would replace the traditional pension plan with a 401(k) plan. The union says this is a strike issue.

The company said its proposal would provide about $24,000 in additional wages and incentive payments over the three-year agreement.

These are the main points of Boeing's offer:

A general wage increase of 6.5 percent, with 2.5 percent the first year and 2 percent the last two years of the contract.

A lump-sum payment of $2,500 when the contract is approved.A new incentive plan that would provide for us to 20 extra days of pay a year if employees exceeded certain targets established by the company.

In a concession to the union, the company's initial offer no longer separates the union's bargaining units in Wichita and in the Puget Sound area. Boeing had long argued that the contracts should be different because the economic conditions of living in Wichita and the Seattle area are not the same.

Although Boeing and the union have been talking since early May, this is the first time the company has put financial numbers on a wage increase and pension improvements.

On average, a Machinist makes a base wage of about $27 an hour, according to Boeing.

The company's offer came on the second day of around-the-clock talks in a SeaTac hotel to try to craft the tough economic details of a new three-year labor contract. Boeing has said it expects to present its best and final offer to the union by Aug. 29. Machinists would vote on the offer Sept. 3. If members reject the contract and two-thirds vote to strike, it would begin just after midnight Sept. 4.