BOEING Co, the world's No. 2 plane maker, and its machinists union said yesterday they will resume talks to end a month-long strike that has stopped aircraft production and delayed the new 787 Dreamliner.

"We have kept lines of communications open and have agreed to pursue additional talks through the federal mediator," Doug Kight, Boeing's lead negotiator, said. "Any agreement must allow us to remain competitive and provide the flexibility to manage our business."

Boeing has offered an 11 percent raise over three years, while rejecting a reduction in the use of outside contractors.

The International Association of Machinists and Aerospace Workers, whose 27,000 members walked out in Washington, Oregon and Kansas on September 6, have asked for a bigger share of the company's record profits and limits on the outsourcing of work.

"We hope this meeting marks a major step forward," the union, also known as IAM, said in a statement.