UAW: Ford to save $850 million annually in health care deal
Wednesday, December 7th 2005, 10:46 am
By: News On 6
DETROIT (AP) _ Ford Motor Co. retirees will start making monthly health care contributions and pay deductibles as part of a tentative agreement the automaker reached with the United Auto Workers, which provided details of the plan Wednesday.
The UAW announced over the weekend that it had reached the deal with Ford, but details were withheld until Wednesday, after the UAW presented the deal to local union leaders. The agreement is subject to ratification by active members. Voting is scheduled to end Dec. 22.
According to the UAW, the agreement raises the cost of prescription drugs and requires hourly workers to make a contribution to a retirement fund.
The agreement is expected to save Ford $850 million annually on a pretax basis, the UAW said.
Ford is the second automaker to reach a health care agreement with the UAW this year. Last month, General Motors Corp. hourly workers voted for a pact that requires workers and retirees to pay more for their health care. The UAW and GM settled on that after months of negotiations.
The UAW said it will now negotiate a similar agreement with DaimlerChrysler AG.
Dearborn-based Ford reported a third-quarter loss of $284 million. The No. 2 U.S. automaker has been struggling to meet its health care obligations as its U.S. market share declines.
Ford spent about $3.1 billion to cover 550,000 hourly and salaried workers, retirees and dependents in 2004 and expects that total to rise to $3.5 billion this year.
The health care agreement is only part of a major restructuring plan Ford expects to announce in January. The company has said job cuts and plant closures will be part of that plan.