A settlement to the strike at Boeing ( BA) was easy to imagine when the workers were calling for a 13% raise and the company was offering an 11% pay hike.

But now, a settlement seems distant, with Boeing and the International Association of Machinists at odds over a different, but no less crucial, issue -- outsourcing practices that will shape the company's future.

Talks broke down Monday, just a day after they had resumed, meaning the strike by 27,000 IAM members is now in its 39th day. Boeing shares closed Tuesday at $45.07, after falling on Friday to $40, their lowest price since March 2004.

In a recent letter to employees, Boeing CEO James McNerney said limits on contract manufacturing could lead Boeing to resemble one of the U.S. automakers, Ford ( F) and GM ( GM), who remarkably managed to transform worldwide industry leadership into a struggle for survival.

U.S. auto companies "all but fatally wounded themselves years ago by promising unsustainable wage and benefit levels and by agreeing to contract conditions (including job guarantees) that limited their flexibility to run their businesses in the face of intense global competition," McNerney wrote. "Today, their market shares continue to fall, and their layoffs have grown by the thousands."

For the IAM, the issue is not so global. Rather, it says "the company is attempting to put the union in an unacceptable position to bargain away our members' jobs," according to a letter to members from IAM District 751 leader Tom Wroblewski. He said Boeing wants to outsource 2,000 jobs involving material delivery, inventory and delivery of parts and materials.

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