DETROIT (AP) — A new contract between Ford Motor Co. and the United Auto Workers union will raise the automaker's labor costs by less than 1 percent a year, reaching a company goal of holding the costs steady, executives said Thursday.
The four-year deal will raise costs by $280 million this year and around $80 million per year after that, but the increases will be offset by increased factory efficiency, other wage and benefit changes, and by hiring more workers at lower wages, the executives told reporters and industry analysts.
Ford's 41,000 union workers approved the contract Wednesday. They won't get annual pay raises but will get $6,000 signing bonuses and about $3,750 in profit sharing this year.
The deal also sets Ford up for a credit rating increase to investment grade status, and it opens the door to a possible dividend on the company's common shares, although Ford isn't ready to announce anything, Chief Financial Officer Lewis Booth said. Investment grade status would lower the company's borrowing costs.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
- Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
- Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
