The proposed modifications to the voluntary employees’ beneficiary association, or VEBA, were not disclosed. The VEBA agreement follows a tentative agreement reached February 15 between Ford and the UAW on labor costs, benefits and operating practices.
Ford said Monday, February 23, that the agreement allows the company to make up to 50 percent of its scheduled payments into the VEBA using Ford common stock.
"We will consider each payment when it is due and use our discretion in determining whether cash or stock makes sense at the time, balancing our liquidity needs and preserving shareholder value," Joe Hinrichs, Ford group vice president of global manufacturing and labor affairs, said in a statement.
The new agreements with the UAW "allow Ford to become competitive with foreign automakers' U.S. manufacturing operations and are critical to our efforts to operate through the current deep economic downturn without accessing government loans and continue to fully invest in our One Ford product plan," Hinrichs said.
Hinrichs said Ford will continue to work with all of its stakeholders to restructure the industry and improve Ford's competitive position.
“The modifications will protect jobs for UAW members by ensuring the long-term viability of the company,” UAW president Ron Gettelfinger said in a statement.
The UAW will review the proposed changes to local union leadership at a meeting early this week. UAW-represented Ford employees must approve any changes to the contract. Proposed changes to the VEBA also require court approval, the UAW said.
Filed by Amy Wilson of Automotive News, a sister publication of Workforce Management. To comment, e-mail firstname.lastname@example.org.
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