UAW President Ron Gettelfinger, left, shakes hands with a local union official as he arrives to discuss the contract.
JEFF KOWALSKY / BLOOMBERG NEWS Enlarge
DEARBORN, Mich. - Ford Motor Co. will keep six plants open and pay $15.4 billion to create a retiree health-care fund under an agreement United Auto Workers local-level officials approved yesterday, clearing the way for a rank-and-file vote.
Ford had planned to shut 16 North American plants, identifying only 10 of them. The remaining six factories will be kept open, and Ford committed to build new vehicles at several facilities, the union said in a contract summary.
UAW local officials approved the accord unanimously, said Chris Kimmons, a delegate from Local 919 in Norfolk, Va.
Gary Chaison, a labor professor at Clark University in Worcester, Mass., said, "It's not an agreement someone can love but it's one the workers can live with. Given the circumstances, I don't think many Ford workers can expect more."
The summary report doesn't mention the Ford Maumee Stamping Plant, which was closed last month and has about 60 employees doing maintenance. It is expected to be sold.
But the company's Lima, Ohio, engine plant is to make the D35 engine through its life cycle and will get a new product, the summary said. The plant has about 900 employees.
Ford, the second-largest U.S.-based automaker, is the last of the three domestic companies to reach an agreement with the UAW.
The company lost a record $12.6 billion last year and is in its second restructuring plan since 2002.
Chief Executive Officer Alan Mulally sought an accord that trims labor costs, and the union tried to preserve jobs.
The agreement is similar to contracts UAW members ratified at General Motors Corp. and Chrysler LLC. The Detroit automakers have said they need to narrow a labor-cost gap with U.S. plants run by Asian competitors such as Toyota Motor Corp. and Honda Motor Co.
"We wanted to have job security and investment," union President Ron Gettelfinger said yesterday. "We have no doubt Ford will survive." He expects 54,000 UAW workers to begin voting tomorrow and voting to be done by Monday.
Marcey Evans, a Ford spokesman, declined to comment about the union summary or details of the agreement.
The union said Ford agreed to build unspecified new vehicles at factories in Chicago; Louisville; Avon Lake, Ohio; and Wayne, Mich. Also, the closing of a St. Paul, Minn., factory that makes the small Ranger pickup will be delayed by one year until 2009, the union said in the summary on its Web site.
The Louisville plant makes the Explorer midsize sport-utility vehicle, which has posted plummeting sales 2002. It's also the home factory of Mr. Gettelfinger, who started there in 1964.
The union summary said the firm will not sell or close any plants beyond St. Paul assembly plant, Cleveland Casting, and Batavia Transmission in Ohio.
The health-care fund payments include $2.2 billion before its creation and $13.2 billion directly to the union-run trust, the UAW said in its summary. Ford will be able to shift its union retiree medical-coverage obligations to the fund.
The union accepted lower wages for new workers, covering about 20 percent of factory jobs, the UAW said. Current union workers' pay won't drop.
The accord also calls for a $3,000 signing bonus, two lump-sum payments equal to 3 percent of pay, and one 4 percent lump-sum payment during the four-year contract. A typical worker will get $12,904 worth of economic gains over the life of the contract, compared with $13,056 at GM and $10,235 at Chrysler.
UAW leaders said Ford has no plans for more layoffs or restructuring, in contrast to Chrysler,
which less than a week after its UAW-represented employees approved their new contract announced plans to cut as many as 10,000 more factory jobs.