Ford - UAW Agreement Details

DETROIT November 6, 2007; Kevin Krolicki writing for Reuters reported that local officials from the United Auto Workers union on Monday voted unanimously to recommend that workers at Ford Motor Co vote to ratify a new four-year contract.

Following are key points in the tentative agreement that UAW officials hope to see ratified by November 12 based on contract highlights prepared by the union.

The contract must be approved by a majority of Ford's roughly 58,000 union-represented workers.

* Ford will pay $13.2 billion to establish a health care trust, known as a Voluntary Employee Beneficiary Association, or VEBA. The trust will take effect in January 2010. Ford's funding will include $6.5 billion in cash contributions beginning in 2008. The automaker also agreed to issue a $3 billion secured note and a $3.3 billion convertible debenture.

* Ford agreed to build new vehicles at three assembly plants that had been targets for possible closure: Louisville Assembly, which makes the Ford Explorer; Michigan Truck, which makes the Ford Expedition and Lincoln Navigator, and Wayne Assembly, which now makes the Ford Focus sedan.

* Ford agreed to delay planned closings at two other plants

-- a truck assembly plant in St. Paul, Minnesota, and a casting plant in Cleveland -- by one year. The Minnesota plant will continue production of the Ford Ranger truck until 2009. The Cleveland plant will continue production until 2010.

* Ford won the right to hire up to 20 percent of its factory work force at a lower wage rate. The new second-tier hires will start at $14.20 per hour, roughly half the current average wage. Unlike the terms of an earlier UAW deal for GM, Ford has the flexibility to use the lower-cost workers throughout its facilities.

* Ford pledged to invest $200 million in new technology and equipment at its stamping plants, invest in its powertrain operations and equip five body shops at its U.S. assembly plants for more flexible production.

* Ford workers will be paid a $3,000 signing bonus and three additional bonus payments over the term of the contract. The UAW estimated that those payments in addition to cost-of-living increases would be worth $12,904 over the four years of the deal for an average assembly line worker.