Ford, UAW reach pact on retiree health trust fund
Automaker will use stock for up to 50% of VEBA liabilities
Amy Wilson
Automotive News
February 23, 2009 - 9:58 am ET
UPDATED: 2/23/09 10:40 a.m. EST
DETROIT -- Ford Motor Co. and the UAW have reached an agreement on
changes to the union's health care trust for retirees.
The proposed modifications to the Voluntary Employees' Beneficiary
Association, or VEBA, were not disclosed. The VEBA agreement follows a
tentative agreement reached Feb. 15 between Ford and the UAW on labor
costs, benefits and operating practices.
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Ford said today that the agreement allows the company to make up to 50
percent of its scheduled payments into the VEBA using Ford common stock.
"We will consider each payment when it is due and use our discretion in
determining whether cash or stock makes sense at the time, balancing
our liquidity needs and preserving shareholder value," Joe Hinrichs,
Ford group vice president of global manufacturing and labor affairs,
said in a statement.
The new agreements with the UAW "allow Ford to become competitive with
foreign automakers' U.S. manufacturing operations and are critical to
our efforts to operate through the current deep economic downturn
without accessing government loans and continue to fully invest in our
One Ford product plan," Hinrichs said.
Hinrichs said Ford will continue to work with all of its stakeholders
to restructure the industry and improve Ford's competitive position.
"The modifications will protect jobs for UAW members by ensuring the
long-term viability of the company," UAW President Ron Gettelfinger
said in a statement.
The UAW will review the proposed changes to local union leadership at a
meeting early this week. UAW-represented Ford employees must approve
any changes to the contract. Proposed changes to the VEBA also require
court approval, the UAW said.
