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Ford Motor Co. will save about $2 billion a year in health care costs as a result of its new labor agreement with the United Auto Workers, the company said today.

The automaker also revealed new details of the two-tier wage system it negotiated with the union that could allow Ford to hire substantially more entry-level workers than previously disclosed.

Ford says its new contract gives it a clear edge over the other two Detroit automakers

While negotiated within the framework established between the UAW and General Motors and Chrysler, the UAW-Ford agreement was tailored to our specific business needs," CEO Alan Mulally told analysts and reporters during a conference call this morning. "The contract terms significantly improve Ford's competitiveness."

One big difference between the Ford contract and the agreements negotiated with the other Detroit automakers is its treatment of hourly retiree health care. Under all three contracts, responsibility for retiree health care will be transferred to union-run trust funds known as voluntary employees' beneficiary associations, or VEBAs.

Ford Controller Peter Daniel said the Dearborn automaker will pay $13.6 billion to permanently erase $23.7 billion in health care liabilities from its balance sheet. Of that, just over $3 billion will be in the form of new cash payments. The remainder will be covered by funding already set aside for retiree health care and two notes valued at $6.3 billion.

more at the link

Mercury C557
22,734 Posts
DetNews said:
...Ford agreed to keep open five U.S. factories that were slated to close as part of its Way Forward restructuring plan. But Hinrichs said Ford is abandoning plans to build a new, low-cost manufacturing facility in North America. He said the automaker also still has the option to idle plants if demand for Ford's cars and trucks drops substantially.

So the rumored new plant in Mexico won't happen
and they'll use an existing U.S. plant instead.

Afaik the main (car) questions are where will C2 & the Huntsman be built, & will the Mustang (or the Mz6) move from AAI?
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