Ford Reduces Wages, To Offer More Buyouts Under New UAW Pact
12 March 2009 - 1:55AM
Dow Jones News
Ford Motor Co. (F) said it will lower wages and narrow the pay
gap with its foreign competitors under a new United Auto Workers
agreement.
The move comes as General Motors Corp. (GM) and Chrysler LLC
(C.XX) are seeking similar wage reductions as a condition to meet
requirements to access more federal low-interest loans. The UAW has
agreed to some GM and Chrysler concession but the sides are still
at odds over retiree health care funding issues.
Ford said its hourly wage, including benefits, will now be about
$55 an hour compared with the $48 paid by foreign auto makers
operating in the U.S., said Ford's Group Vice President of Global
Manufacturing Joe Hinrichs. UAW members ratified the wage changes
and other cost-cutting initiative Monday.
As part of the accord, Ford will begin a new company-wide buyout
program on April 1. The offers will be lower than previous programs
because of the economy, Hinrichs said without providing further
details. The offer will end May 22.
Hinrichs also confirmed that Ford will end production at its
Wayne, Mich. plant, home to the Ford Focus. Focus production will
be moved next door to the Michigan assembly plant which is being
re-tooled to produce smaller vehicles. The plant had assembled the
Ford Expedition and Lincoln Navigator sport-utility vehicles. The
"consolidation" will not result in any job losses.
Ford said last year that it was converting the plant in an
effort to produce more small cars in the U.S. as consumers moved
away from buying SUVs and pickup trucks.
Ford shares increased 7% or 13 cents to $1.98 in earlier trading
Wednesday.
-By Jeff Bennett, Dow Jones Newswires; (248) 204-5542;
jeff.bennett@dowjones.com