DOW JONES NEWSWIRES
The United Auto Workers tentatively agreed to contract changes
that will help the three Detroit auto makers compete with foreign
companies.
The parties are still in talks regarding the voluntary employee
beneficiary associations' retiree health-care trusts.
"The changes will help these companies face the extraordinarily
difficult economic climate in which they operate," said UAW
President Ron Gettelfinger, who didn't specify the amended
terms.
In a statement Tuesday afternoon, Joe Hinrichs, Ford Motor Co.
(F) group vice president for global manufacturing and labor
affairs, said the UAW agreement "would help Ford operate through
the current economic downturn without accessing a U.S. government
bridge loan."
General Motors Corp. (GM) and Chrysler LCC are filing viability
plans with the Treasury Department on Tuesday afternoon as part of
their agreement to receive billions in federal funds. Ford hasn't
accepted a federal bailout, but it is suffering along with other
auto makers from a steep decline in sales during the past several
months.
The VEBAs were established in 2007 labor negotiations and
designed to take responsibility for tens of billions of dollars in
health-care obligations next year. When activated, the VEBAs will
relieve the auto makers of several billion dollars of annual
health-care costs.
As part of their loan agreement with the Treasury, GM and
Chrysler agreed to restructure the VEBAs with the UAW by replacing
half of the cash owed to the fund with stock.
Hinrichs said the agreement includes modified provisions on
labor costs, benefits and operating practices that allow Ford to
reach competitive parity with foreign-owned automakers'
manufacturing operations in the U.S.
Ford's shares climbed 5.9% to $1.79 in after-hours trading and
GM's rose 3.2% to $2.25.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com