Ford, UAW Reach Deal

Ford Motor Co. and the United Auto Workers have reached a four-year labor agreement, averting the strikes that hit fellow automakers Chrysler and General Motors. Ford will establish an independent trust to manage retiree healthcare, and it also was expected to create a two-tier wage structure. People familiar with the talks said the agreement appears to make greater concessions regarding wages and retiree healthcare funding than did GM and Chrysler, in exchange for which Ford will keep open several plants it previously had intended to close as part of a restructuring. Ford posted a $12.6B loss last year. "Our goals for this contract were to win new product and investment, to enhance job security and protect seniority -- and we made progress in all these areas," the UAW negotiator said. Ford, meanwhile, said "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 U.S." Details of the pact, which covers some 54,000 workers and still must be approved by the union members, were withheld pending ratification.

Sources: Bloomberg, Financial Times, Wall Streeet Journal, AP
Commentary: Goldman Lowers Estimates for GM, Ford; Raises Magna • Why Are Ford and Chrysler Letting GM Lead Negotiations With the UAW?
Stocks to watch: F. Competitors: GM, TM, HMC, NSANY
Earnings call transcript: Ford Q2 2007

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