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November 3, 2007
Ford, UAW Reach Tentative Agreement
The United Auto Workers announced they have reached a tentative 4-year agreement with Ford Motor Company that would lower costs for the automaker:
The deal, reached around 3:20 a.m., must be ratified by the UAW's approximately 54,000 members covered by the contract at Ford. Ford is the weakest financially of the three largest domestic automakers and the deal is seen as a godsend for the company. They had been bleeding badly as a result of high health insurance and pension costs so the improved work rules and the union taking over the pension fund should help them become more competitive over time.
If approved, it would bring a close to historic negotiations that have yielded agreements designed to return U.S.-based automakers to profitability. Details of the Ford agreement were not immediately released, but the deal likely will be close to what was negotiated with General Motors Corp. and Chrysler LLC.
Those pacts - which were reached after short strikes against the automakers - include a union-run trust that would take over the companies' retiree health care obligations, a lower-tier wage scale for some workers and some job security pledges. In a statement, Ford confirmed that the deal includes the retiree health care trust fund and said the trust is subject to approval by the courts and the U.S. Securities and Exchange Commission.
"Though we will not discuss the specifics of the tentative agreement until after it becomes final, we believe it is fair to our employees and retirees, and paves the way for Ford to increase its competitiveness in the United States," Joe Laymon, Ford's group vice president for human resources and labor affairs, said in the statement.