Ford workers approve UAW pact changes

DETROIT (AP) — Unionized workers at Ford Motor Co. have approved contract changes that include freezing wages and cutting benefits in a move aimed at helping the automaker remain competitive.

The United Auto Workers said Monday a majority of hourly workers voted in favor of modifications to the 2007 contract with Ford, eliminating cost-of-living increases and cash bonuses.

The agreement is expected to be a model for Chrysler LLC and General Motors Corp., which need to bring their labor costs in line with those of foreign auto companies’ plants in the U.S. as a condition for the $17.4 billion they have received in federal loans so far.

Under terms of their loan agreements, progress must be made by March 31. The companies are seeking an additional $21.6 billion in government aid.

Dearborn, Mich.-based Ford, which has not sought government funding as its rivals have, is the first U.S. automaker to come to an agreement with the union. The company said that it did not want to be at a disadvantage should its competitors negotiate lower labor costs with the UAW.

Ford has thousands of employees in Ohio, which has ties to the auto industry second only to Michigan. Among vehicles made in Ohio is the Ford Econoline van in Avon Lake.

The UAW pact also allows Ford to use company stock to make payments to a union-run health care trust, called voluntary employee beneficiary associations, or VEBAs.

Ford can use stock to pay up to 50 percent of its payments, which would pay retiree health care benefits. Ford owes $6.3 billion to its VEBA at the end of this year.

Chrysler is a privately held company and would have to grant partial ownership to the union, since there are no public shares of the company.

Chrysler must pay around $9.9 billion to its trust at the end of the year, while GM has to pay about $20 billion.

The UAW said 59 percent of production workers and 58 percent of skilled-trades workers voted for the concessions.