UAW Ratifies Ford Contract Modifications

The United Auto Workers union has ratified modifications to the 2007 labor agreement with Ford Motor Co.

Under terms of the modified agreement, UAW members will accept the elimination of holiday and Christmas bonuses, plus a cut in daily break time from one hour to 50 minutes; forgo cost-of-living increases, performance bonuses; and accept further Ford buyout packages.

Additionally, union members have agreed to accept Ford stock in lieu of 50% of the auto maker’s promised cash contribution to the Voluntary Employee Benefit Fund, which formed part of the contract negotiated in 2007 to fund health-care benefits for retired workers and surviving spouses.

Fifty-nine percent of production workers and 58% of skilled-trade employees voted for the agreement in balloting that took place at UAW Ford locations throughout the U.S, the union says.

“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,” UAW President Ron Gettelfinger says in a statement. “We are focused on doing everything possible to rebuild a great industry and keep manufacturing jobs in the U.S.

“As we have stated many times, in order to succeed, shared sacrifices will be required from all stakeholders, including executives, shareholders, bondholders, dealers and suppliers.”

In a statement, Joe Hinrichs, Ford group vice president-global manufacturing and labor affairs, says Ford is pleased with the ratification.

“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 U.S. government,” he says.

With the ratification of the agreement, it’s likely General Motors Corp. and Chrysler LLC will receive similar consideration, if the UAW adheres to a long-standing policy of pattern bargaining that equalizes the compensation packages at the Detroit Three.

While important to Ford, the VEBA concessions arguably are more valuable to GM and Chrysler, which must bring labor costs in line with offshore-based auto makers under terms of the companies’ loan agreements with the federal government.

President Barack Obama’s auto taskforce is in Detroit today visiting with key GM and Chrysler executives.

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