Ford has hit a home run in negotiations with the UAW, setting a precedent for GM and Chrysler and freeing up the cash it needs to stay out of the government bailout cookie jar.
Under the newly amended contract, Ford will now fund half of its retiree health care benefit fund using common stock instead of cash. The change in funding will free up millions of dollars, which will be put to use for retooling and product planning.
Nearly 60 percent of UAW members voted in favor of the amendments to their existing contract with Ford; It is likely that General Motors and Chrysler will negotiate similar concessions in the coming weeks.
“We are facing an unprecedented loss of sales and revenue at Ford,” said UAW Vice President Bob King, who directs the union’s Ford department. “Our bargaining committee made an extraordinary effort to negotiate changes in a responsible way that will help Ford be competitive, while still protecting our active and retired members."
“The voting results show that our members are prepared to make painful sacrifices in order to be part of the solution to the problems facing Ford and the U.S. auto industry," said King, speaking with Automotive News.
(AN | Photo Credit: AP via Buffalo News)
I've read a post about this earlier today, and I must say that it is very generous and kind of Ford to take such a step in giving health benefits to their retired employees.
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