ST. CHARLES, MO. ? Nearly 2,600 union Machinists in suburban St. Louis approved a labor contract Sunday between Boeing Co. and the International Association of Machinists and Aerospace Workers District 837.

The three-year deal was reached late Wednesday. The Chicago-based aerospace company said the agreement calls for an average 9.5 percent compensation increase over the life of the contract, as well as a 17 percent increase in pension benefits.

The close vote of 951 to 883 in favor of the contract sends a message to Boeing that many employees were unhappy with the contract, said Ricky Smith, president of the Machinists.

“It tells them that come Monday morning, we’re going to have a lot of unhappy folks,” Smith said. He and other union leaders recommended accepting the contact although they disagreed with portions of it.

“To ask our members to go on strike for three weeks, six weeks or six months – we didn’t feel like there was anything in there that warranted that,” Smith said.

Boeing spokesman Forrest Gossette said both the company and the union compromised on the contract.

“It’s our contract and we’re very happy with it,” Gossette said. “It’s a competitive contract for our employees.”

The IAM workers are part of Boeing’s St. Louis-based Integrated Defense Systems, making everything from fighter jets like the F-18 Super Hornet and F-15 Eagle to missiles and component parts.

The contract calls for a 4 percent general wage increase this year and another 3 percent increase in 2009. But it also calls for lump-sum payments of $2,500 in both 2007 and 2008. The company said the deal will provide about $24,000 in additional compensation over the term of the agreement.

The average Machinist earns about $58,000 annually, Machinists spokesman Tom Pinski said.

The improvement in the pension plan will mean workers retiring after July 1 will have benefits of $70 per month for each year of service.