The United Auto Workers announced that the majority of its hourly workers have voted in favor of modifications to the 2007 contract, a move that will eliminate cost-of-living increases and cash bonuses to help the manufacturer remain competitive. UAW said that 59 percent of the company's production workers and 58 percent of the skilled trades employees voted for the new contract to come into effect, while at least two local unions rejected the pact.
The new agreement allows Ford to use company stock to pay a union-run health care trust, the Voluntary Employee Beneficiary Association (VEBA). Stock can be used to pay up to 50 percent of VEBA's payments.
UAW workers will still receive the base wages they currently have, but the deal limits extra payments for laid-off workers while they receive unemployment benefits. The agreement also ends the job bank program that allowed workers to receive most of their pay from Ford when they got laid off.
“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,” Ron Gettelfinger, UAW president said in a written statement quoted by the source.
Ford is the first US based manufacturer to reach an agreement with its workers. The company stated that it did not want to be placed in disadvantage by lower contract agreements made by its competitors.
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