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Ford Motor Co. workers agree to cost-cutting: union

Ford Motor Co. workers agree to cost-cutting: union

Workers at Ford Motor Co. have ratified a deal that will save the struggling automaker billions of U.S. dollars in health care costs, the United Auto Workers union said Monday.
The announcement comes as the U.S. government's "working group" on the automobile industry was meeting with the union and top managers of General Motors and Chrysler as they try to chart a way to restructure the two companies to avoid bankruptcy. The deal will allow Ford to cut labor costs and meet up to 50 percent of its US$13.2 billion obligation to a trust fund for retiree health care benefits with common stock instead of cash.
A similar agreement is expected shortly at GM and Chrysler because the union maintains similar contracts at each of the Detroit Three.
That will allow GM to cut its cash outlays by as much as US$10 billion and Chrysler to improve its liquidity position by US$5.3 billion.
A deal is also necessary in order for GM and Chrysler to meet a key requirement of their US$17.4 billion bailout packages ahead of a March 31 deadline.
While Ford has repeatedly said it has enough cash to survive the downturn without government aid, it has used the deep recession in the industry to seek concessions from the union. Ford welcomed the deal, which it said would help it weather the collapse of auto sales amid a deepening recession and become more competitive in the long-term.
"By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers and that are important to our efforts to operate through the current economic environment without accessing a bridge loan from the US government," Joe Hinrichs, Ford vice president for global manufacturing and labor affairs, said in a statement.
The UAW has always enjoyed better relations with Ford than with either Chrysler and GM and the union is using the negotiations with Ford to shield itself from demands for more concessions from the other two automakers. "Once again UAW members have stepped up to make the difficult decisions necessary to deal with the reality of the current economy, the deteriorating auto industry as a whole and specifically the negative impact the economic climate is having on Ford Motor Co.," said UAW President Ron Gettelfinger.
The contract concessions will eliminate two paid holidays, eliminate two one-time productivity bonuses due next year, end the quarterly cost-of-living wage adjustments and put new limits on supplemental unemployment benefits that workers have been paid for a half-century.


Updated : 2021-08-03 05:18 GMT+08:00