Ford Motor Company says it has reached a tentative deal with the UAW regarding modifications to the Voluntary Employees' Beneficiary Association (VEGA) pact, the union's retiree health care trust. While specifics are not yet being divulged, the Blue Oval says that it has agreed to make up to half of its future payments into the fund with Ford common stock, although it may continue to use cash depending on the automaker's needs.
Before this and other changes can take effect, the UAW will review the agreement later this week, and any alterations must be signed off on by UAW-represented Blue Oval workers as well as the court system. Ford says that the VEBA agreement, combined with the labor deal reached on February 15, will help the automaker be more competitive during the economic recession without federal loans. Be sure to check out Ford's press release after the jump.
[Source: Ford | Image: Bill Pugliano/Getty]
UAW AND FORD REACH TENTATIVE AGREEMENT ON FUTURE FUNDING OF THE VEBA HEALTH CARE TRUST
Editor's Note: The following statement is attributable to Joe Hinrichs, group vice president, Global Manufacturing and Labor Affairs, Ford Motor Company.
Dearborn, Mich., Feb. 23 – The United Auto Workers union and Ford Motor Company have reached a tentative agreement on modifications to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust.
We are pleased with this agreement, which provides us the option to settle with Ford common stock up to 50 percent of the payments into the VEBA in lieu of cash. We will consider each payment when it is due and use our discretion in determining whether cash or stock makes sense at the time, balancing our liquidity needs and preserving shareholder value.
The VEBA agreement – together with the agreement reached Feb. 15 by Ford and the UAW to modify certain operating provisions of the 2007 National Labor Agreement – is subject to ratification by the active UAW-Ford membership and other conditions, including pursuing restructuring actions with other stakeholders. Additionally, the VEBA agreement requires court approval.
The agreements, if finalized, will allow Ford to become competitive with foreign automakers' U.S. manufacturing operations, and are critical to our efforts to operate through the current deep economic downturn without accessing government loans and continue to fully invest in our ONE Ford product plan.
I would like to thank the entire UAW leadership and national bargaining committee – particularly UAW President Ron Gettelfinger and UAW Vice President Bob King – for their leadership during these important discussions. I also would like to thank Ford's national bargaining team for their tireless efforts over the past few weeks.
All of us at Ford will continue to work with all of our stakeholders to participate in the current industry restructuring and improve our company's overall competitiveness.
About Ford Motor Company
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 213,000 employees and about 90 plants worldwide, the company's wholly owned automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford's products, please visit www.ford.com.