Ford's UAW deal nets $2 billion savings
Ford is arguably the domestic maker in the most trouble, and it appears the UAW has allowed more concessions for Ford than for either of the other two domestic car car makers in its contract negotiations. With combined savings from the end of health care obligations, revised rules on hiring, salaries, and classifications, Ford will be able to put $2 billion more in its coffers every year.The largest lump came from Ford -- as with GM and Chrysler -- earning a release from its health care obligations by contributing to a VEBA. Ford's contribution of $13.6 billion will rid itself of the $23.7 billion health care shadow it stood in. That is less than the other two of the Big Three contributed, and once approved will save Ford $1 billion per year.
The other savings come from the UAW's flexibility in allowing Ford to make more than 20-percent of its workforce lower-paid hourly workers, who get up to $50 less per hour than other UAW workers. The UAW is also doing things like reclassifying skilled trades categories, reducing them from 350 to 22. In return, Ford has stepped back from plans to idle some plants, is bringing some outsourced jobs back in-house, and is making plants more flexible so that they can build different cars more easily, instead of being shut down.
In a related article, Automotive News (Sub. Req.) is reporting that the extra cash will be used to revamp Ford's North American product line in the next few years, including the accelerated development of several new models.
[Source: Detroit News, Automotive News]
Reader Comments (Page 1 of 1)
tankd0g 11:17AM (11/19/2007)
$50 less an hour than other UAW workers? Just how much are these other people making an hour!?
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Jay Evans 11:34AM (11/19/2007)
"Total hourly compensation for these new employees -- including benefits -- will range from $26 to $31 an hour. Mulloy said that represents a savings of between $51 and $56 an hour compared to current workers. "
Wages, Benefits, Taxes, UC etc. There is far more costs to an employer for each employee than the figures on your paycheck
tankd0g 11:37AM (11/19/2007)
Thank you for clearing up my impression that there were nothing but millionaires on the assembly line buildng the lastest whatever :)
elprogramer 8:17PM (11/19/2007)
Chrysler and GM got the same deal, except for current workers and vehicle assembly workers.
Toyota and Honda will spend nearly $50 on an employee, the Big Three are now at $25.
ferrarimanf355 11:20AM (11/19/2007)
If bringing the Euro Focus over is part of the plan, I'm all for it.
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raz 11:45AM (11/19/2007)
This is the car that can save GM, this Opel.
http://www.tengears.com/home/2007/11/19/opel-astra-tuned.html
But, and this is a HUGE but.....it needs to be priced BELOW Honda Civic.
Same with Euro Focus that ferrari man suggested.
Tired 12:35PM (11/19/2007)
Raz -
You really think a tuned hot hatch is going to save GM?
raz 12:46PM (11/19/2007)
Tired...
Yes, it will bring the young consumer back.
People have such great experience owning Civic they do not even look at other automakers, their next car is Accord or CR-V. If GM can do they will be able to sell Impalas and Auros and Malibus .........and make money in doing so.
Look at Mitsubishi, they were a horrible company before new Lancer and Eclipse. A great, cheap car will definatly bring back exitment about GM for consumers.
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