Ford’s UAW Expected to Reduce Hourly Rates, Benefits to Compete with Foreign Automakers
UAW members at Ford Motor Co. have ratified modifications to the UAW Ford 2007 labor agreement. Fifty-nine percent of production workers and 58 percent of skilled-trades workers voted for the agreement in balloting that took place at UAW Ford locations throughout the U.S.

According to Ford company officials March 11, these approved concessions are expected to lower the hourly wage rate at Ford to $55/hour in 2009, including benefits, pensions and bonuses. According to company estimates from December, foreign competitors’ hourly rates in the U.S. were around $48-49/hour and are expected to rise in the future. Company officials stated that they expect to be in parity with the competitor’s rates within a couple of years.

The concessions in the ratified agreement are expected to save Ford $500 million annually beginning in 2010, and will save about three-fourths of that in the remainder of 2009. Half of those savings will come directly from the cut in bonuses and benefits. Ford will also be offering revised buyout options, from April 11 to May 22, to all hourly employees, except for certain highly skilled positions.

These modifications will help Ford remain on track to deliver their key business and financial goals over the next few years, according to company officials.

Tags: American Business, automotive, Business

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