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UPDATE 1-Boeing workers vote for 'micro-union' at South Carolina plant

(Recasts with vote result, adds comments from Boeing and machinists' union)

NORTH CHARLESTON, S.C., May 31 (Reuters) - A small group of workers at Boeing Cos South Carolina jetliner factory voted Thursday to unionize but the planemaker announced it would challenge the legality of the bargaining unit.

The 104-65 vote to join the International Association of Machinists and Aerospace Workers comes one year after Boeing defeated a high-profile and much broader union drive in a state where the laws do not favor organized labor.

The vote also comes a few months after the National Labor Relations Board (NLRB) made it tougher for workers to form unions made up of small groups of employees, reversing an Obama-era decision that had been criticized by businesses.

The South Carolina flight readiness technicians at Boeing have spoken loud and clear," Bob Martinez, president of the International Association of Machinists and Aerospace Workers, said in a statement Thursday. "I am asking Boeing to respect their freedom to choose and not retaliate against them for expressing their rights."

Boeing had asked the National Labor Relations Board last week to stop the vote, calling the proposed bargaining unit of 176 workers "an artificially gerrymandered sub-set of employees."

The labor relations board denied Boeing's request on Wednesday. "Boeing continues to believe that this type of micro-unit is prohibited by federal law," the company said on Thursday. "While we are deeply disappointed with the result and are appealing, we will come together as we continue to deliver on our customer commitments.

Forming smaller bargaining units can be a key organizing strategy for unions, particularly when they lack support from a majority of an employer's workforce. But business groups say that smaller bargaining units fracture workplaces.

"The election is of enormous consequences not just to Boeing and its teammates, but to businesses nationwide and to the economy," Boeing lawyers said last week in the request it filed with the NLRB to stop the vote. "The (NLRB) regional director's analysis would accommodate nearly any micro-unit in an integrated manufacturing system, essentially spelling the death knell for manufacturing facilities like Boeing South Carolina."

Boeing is the largest exporter in the United States.

This is the machinists' third attempt to organize Boeing workers at the company's only jetliner assembly plant outside Washington state. Boeing employs about 6,800 people at the North Charleston plant, which makes 787 Dreamliners and is the only site that assembles the largest version, the 787-10.

Boeing workers voted 2,097-731 last year to reject the union. In 2015, the union withdrew a vote petition.

South Carolina is a "right-to-work" state, one of 28 states that bar unions from requiring workers to join up as a condition of employment. The law has helped South Carolina lure Boeing, automakers and other manufacturers which have unions at their plants in other states.

Some workers at the factory want the union to help with pay, the lack of opportunity to become managers, sudden schedule changes and mandatory weekend overtime work.

"There's a large contingent on the flight line that asked IAM to come back this year and organize us," Curtis Williams, 52, a flight-line readiness technician, said on Wednesday.

Workers received a raise last year, but flight-line technicians at the plant earn about 30 percent less than their counterparts in Washington state, Williams said.

While this will be the first union at the South Carolina plant, the machinists' union said it represents about 35,000 Boeing employees in 24 locations nationwide.

(Reporting by Harriet McLeod; Editing by Peter Cooney and Lisa Shumaker)