Ford Says Labor Costs to Rise 1.5% Annually
01 December 2015 - 1:20AM
Dow Jones News
Ford Motor Co. said its labor costs will grow about 1.5%
annually over the next four years under a new labor agreement with
the United Auto Workers union, less than the company's projected
rise in inflation.
The company also said early Monday it will incur a $600 million
charge in the fourth quarter related to the contract, which will
pay each worker $10,000 in bonuses this year for ratifying the deal
earlier this month. The contract covers about 52,900 U.S. hourly
workers at Ford.
The No. 2 U.S. auto maker noted the latest agreement will help
bring Ford's labor costs closer to those at GM and Fiat Chrysler.
Fiat Chrysler's have long been the lowest of the U.S. auto makers,
largely because the company has a greater number of lower-paid
workers.
"This agreement enables us to further strengthen our business
and continue investing in manufacturing in the U.S.," said Chief
Executive Mark Fields in a statement. Ford will hold a conference
call Monday at 9 a.m. EST to further discuss the contract
costs.
The auto maker's labor costs are closely watched by Wall Street
for their impact on the bottom line. All three U.S. car makers
secured new four-year agreements with the UAW over the last two
months.
UAW leaders have touted the Ford agreement as one of the richest
in the union's history giving workers raises and securing $9
billion in new U.S. factory investment.
However, according to Ford, the pact does include some offsets,
such as the ability to use more lower-paid temporary workers and
greater flexibility to move production around globally.
Write to Christina Rogers at christina.rogers@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 30, 2015 09:05 ET (14:05 GMT)
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