Dearborn, Michigan – The United Auto Workers Union (UAW) and Ford Motor Company have reached a tentative agreement on modifications to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust in the U.S.
“We are pleased with this agreement, which provides us the option to settle with Ford common stock up to 50 per cent of the payments into the VEBA in lieu of cash,” said Joe Hinrichs, group vice-president of global manufacturing and labour affairs, in a statement. “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.”
The VEBA agreement, together with the agreement reached February 15 to modify certain operating provisions of the 2007 national labour contract, is subject to ratification by the active UAW-Ford membership. The VEBA agreement also requires court approval.
Hinrichs said that the agreement, if finalized, will allow Ford to become competitive with foreign automakers’ U.S. manufacturing operations, and is critical to the company’s efforts to operate through the economic downturn without government loans.