Ford About To Close Deal With UAW

November 7, 2007 at 7:31 am Leave a comment

After General Motors had closed a deal with the United Auto Workers union, Ford and Chrysler are expected to follow suit. Much of the problems of the Big Three has something to do with their trouble with the union. Even with sales on the decline, the UAW is pressing automakers to give them fair treatment.

Recently, The Auto Channel reported the details on the tentative agreement between Ford and the UAW. Here are some of them:

  • 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 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 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.

The union will still be voting whether they will accept Ford’s conditions. The automaker needs to resolve the issue as soon as possible as they do not want to risk a possible strike against them. It can be remembered that the UAW strike against General Motors due to the fact that they have not come to terms right away.

Ford needs the union as it is in the middle of its turnaround plan after suffering declining sales for the past months.

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