From: Reuters
Published November 14, 2007 11:32 AM

UAW workers ratify new Ford contract

DETROIT (Reuters) - The United Auto Workers union said on Wednesday that its members have ratified the new labor contract with Ford Motor Co <F.N that clears the way for the automaker to shift its retiree health care liabilities to a trust fund.

The UAW said 79 percent of its membership voted for the new Ford contract that was reached on November 3.

The new contract covers about 54,000 active workers at Ford and more than 94,000 Ford retirees and 28,000 surviving spouses. It will expire September 14, 2011.

"We stood our ground in the face of some rather big asks by the company and came away with a creative agreement that addresses the concerns of our members, and also gives the company the opportunity to move forward," UAW President Ron Gettelfinger said.

The UAW has now completed new labor deals with all three U.S. automakers.

Under the deal, Ford pulled back from a plan to close six U.S. facilities that it had not yet identified and agreed to new investment in some U.S. plants.

In exchange, the company won the right to hire up to one-fifth of its U.S. work force under a lower-tier pay structure starting at just over $14 per hour -- roughly half its current average factory wage.

The proposed contract would also establish a trust fund to take over Ford's estimated $22 billion obligation for retiree health care.

Under the new contract, Ford agreed to pay $13.2 billion to establish that trust, known as a Voluntary Employee Beneficiary Association, or VEBA. In addition, Ford will shoulder the $2.2 billion estimated cost of providing retiree health care until the VEBA takes effect in 2010.

(Reporting by Poornima Gupta, editing by Gerald E. McCormick and Dave Zimmerman)

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