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Ford: UAW Deal Means No Federal Loans

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Ford says a late-breaking deal with the United Auto Workers (UAW) means it will not have to depend on government loans to stay solvent in 2009.

The company, in a press release just issued, says that a tentative deal will modify the Ford-UAW labor deal that took effect in 2007. The terms of the new deal will help Ford squeak through the current auto-sales slump without a loan from Washington, while the company still funds its future product development. As a result of the deal, Ford suggests in the release, it will have competitive wages, benefits and work rules with transplant-brand factories located here in the U.S.

Left unsaid: how much of the deal is shared with GM and Chrysler, since Ford has been a part of the pattern bargaining that has governed work rules for the Big Three since Moses was allowed to bring the Ten Commandments without a UAW card. The Big Three have been trying to fulfill their healthcare and pension liabilities in part with stock--which, rightfully, the UAW rank and file see as a major gamble.

Is it a bigger gamble to let the automakers file Chapter 11? We'll know more in the next six weeks as final turnaround plans are twiddled with, in advance of a March 31 viability deadline. The Ford release follows; GM offers up its plan shortly.

UAW-FORD REACH AGREEMENT ON OPERATING ISSUES; DISCUSSIONS CONTINUE ON VEBA HEALTH CARE TRUST

Editor’s Note: The following statement is attributable to Joe Hinrichs, group vice president, Global Manufacturing and Labor Affairs, Ford Motor Company.

Dearborn, Mich., Feb. 17 – The United Auto Workers union and Ford Motor Company have reached a tentative agreement to modify certain operating provisions of the 2007 UAW-Ford National Labor Agreement, which if ratified would help Ford operate through the current economic downturn without accessing a U.S. government bridge loan and continue to invest in the company’s ONE Ford product-led transformation.

The agreement, reached Sunday afternoon, includes modified provisions on labor costs, benefits and operating practices that allow Ford to reach competitive parity with foreign-owned automakers’ manufacturing operations in the U.S.

A final settlement agreement is contingent upon the UAW and Ford reaching agreement on funding issues associated with the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust.

The final agreement would cover approximately 42,000 UAW-represented employees in the United States and would be subject to ratification by the active UAW-Ford membership.

As we are still in discussion regarding the VEBA, Ford will not discuss additional details at this time.

While we have more difficult work to do, I would like to thank the entire UAW leadership and national bargaining committee – particularly UAW President Ron Gettelfinger and UAW Vice President Bob King – for their leadership during these important discussions.

All of us at Ford will continue to work with all of our stakeholders to participate in the current industry restructuring and improve our company’s overall competitiveness.

 
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