Ford Motors to save big with latest deal with UAW
Ford Motors is currently running in a crisis in their domestic market of United States. They are making huge losses and are on the brink of announcing massive job cuts and plant shutdown. There is however some good news. Ford is now expected to save over a $1 billion a year in health care costs under an agreement with the United Auto Workers union.
They just went into this new agreement with the UAW who said it had agreed to higher payments for health care for hourly employees at Ford. They have finally agreed to help the company cope up with the losses and get back to profitability as soon as possible. However, the agreement is still required to be subjected to ratification by rank-and-file members of the UAW at Ford.
Ford has already reported that it was looking towards an expenditure of about $3.5 billion in health care this year. The deal with the UAW is also expected to reduce Ford’s total health care liabilities by about $7.8 billion. The company is facing huge pressure from the competitors like Honda and Toyota in the market as the consumer is showing preference for fuel-efficient models rather than old-fashioned gas guzzling trucks and SUVs.
The company has already lost more than $1.4 billion before taxes this year in their North American operations. They are due to announce a comprehensive restructuring plan in January to restore North American operations to profitability.