Ailing Ford gets deal that fits its needs

[jpd80]

LINK

 

In exchange for increased investment in new cars, trucks and Ford's manufacturing operations, according to a source familiar with the negotiations, Ford would fund an independent trust for retiree health care with $6.9 billion in cash, a smaller percentage of cash than GM or Chrysler are putting into similar trusts.

 

For Ford, that represents roughly 40 percent of the $17.3 billion the automaker agreed to pay toward its total $23-billion retiree health care obligation, with the remainder financed by convertible notes. GM, by contrast, paid roughly 54 percent of its obligation in cash.

 

In a novel twist proposed by Gettelfinger and quickly embraced by Mulally, Ford will invest the cash it would have paid into the trust, known as a voluntary employees' beneficiary association, or VEBA, in its U.S. assembly plants. Factories that do not already have flexible body shops will get them, making Ford a far more nimble manufacturer than it is today. The cash also will be used to upgrade equipment in older facilities.

 

The trade-off appears to be a win for factory-level UAW locals worried that Ford would close as many as six more factories across North America, including two assembly plants. It also reinforces a mantra Gettelfinger repeated during the talks, according to a source familiar with the situation: "If Ford is stronger, that will make our membership more secure."

 

Additionally, unlike the GM and Chrysler deals, Ford's contract does not define hourly jobs as "core" assembly line jobs and "non-core" manufacturing jobs, such as materials handling, to justify permanently lower wages for new hires. Ford and the UAW agreed that 20 percent of the automaker's hourly work force would be second-tier workers -- meaning, effectively, that virtually all new hires, no matter what their job, would be paid the lower wage-and-benefit package until the 20 percent cap is reached.

 

Sounds OK but are the workers going to like it or not?

 

Gee, I wonder why Ford wants the deal ratified before the third quarter results are released on Thursday?

Could it be Ford is not the basket case it is pretending to be?

Edited November 5, 2007 by jpd80

[Furious1Auto]

Sounds OK but are the workers going to like it or not?

 

Gee, I wonder why Ford wants the deal ratified before the third quarter results are released on Thursday?

Could it be Ford is not the basket case it is pretending to be?

I would bet not, that's why we addressed suspending the ratification vote until we have time to read the tentative agreement at our regular meeting. The motion was made supported and carried, they won't get a vote until after the results are out!

Edited November 5, 2007 by Furious1Auto

[jpd80]

I would bet not, that's why we addressed suspending the ratification vote until we have time to read the tentative agreement at our regular meeting. The motion was made supported and carried, they won't get a vote until after the results are out!

Good, I hope the guys get to see Q3 in all its glory.

[Furious1Auto]

Good, I hope the guys get to see Q3 in all its glory.

There is more to come wait until we surpass Toyota and Honda in TGW, we can and will out build them given good quality materials! Their is not on Asian that I know that can do a better job than me except maybe in the kitchen! I like my General Tso's Chicken with the Lo Mein noodle! :D

[Ralph Greene]

It's not so much Ford's current financial condition you need to worry about, it's how well they will get thru the next recession. This business cycle is winding down, the last low in the economy was in winter 02, so this current business cycle is getting old. The fed hopes for a "soft landing" and not a recession, bur odds don't favor that based on history. Ford will soon needs it's cash hoard.

[CSMJ]

I would bet not, that's why we addressed suspending the ratification vote until we have time to read the tentative agreement at our regular meeting. The motion was made supported and carried, they won't get a vote until after the results are out!

Good for Avon I hope brookpark does the same!! Every local should wait at least a week to read the details.

Ford said they took 2 ass. plants and WSP off the list but the other 3 part plants are not mentioned in many articles except 1 I read said Ford could still shut them down so WTF is going on here?? This is why we should wait.

Edited November 5, 2007 by CSMJ

[Biker16]

Is it reasonable for ford to keep these plants open?volume is volume and there isn't enough of it to keep these plants open.

 

Wayne is not the place to make C cars it just isn't efficent enough without huge modification to it layout, paint shop and body shop.

 

Louisville will continue to lose volume until they replace the explorer,or add the ranger.

 

 

I don't want Ford to make promises it can't keep or keep promises it can't afford to keep.

[ShockFX]

Sounds OK but are the workers going to like it or not?

 

Gee, I wonder why Ford wants the deal ratified before the third quarter results are released on Thursday?

Could it be Ford is not the basket case it is pretending to be?

 

Ford doesn't want incorrect conclusions drawn from results that may exceed expectations. No more, no less. If Ford reported a $5B profit on a one time sale of something, the headline might read "Ford reports $5B profit!" This might lead people that don't understand financial accounting (99% of the population) to think Ford is in great shape. The best thing that can happen is a quick UAW ratification, then great results, and after 4 years of great profit sharing checks everyone is happy. <--- Most idealistic thought ever lol.