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Ford to cut jobs to make a profit Car union looks to seal Ford deal
(about 6 hours later)
US carmaker Ford and the United Auto Workers union (UAW) have struck a tentative deal on the terms of a new labour contract. United Auto Workers (UAW) president Ron Gettelfinger says he hopes to wrap up a ratification vote on a proposed four year deal with Ford by next Monday.
The deal centres on Ford's pledge to pay billions of dollars toward health care for retired workers. He was speaking after union local officials unanimously backed the tentative deal.
But if its 58,000 union members agree to the terms, sweeping job cuts at Ford could be on the cards. And he also said he did not expect Ford to announce any further job cuts in the wake of the contract.
The talks have been focused on health pay, health care for retired workers, and new contracts.
It seals an historic round of talks between the main US auto industry's union and three US car giants.It seals an historic round of talks between the main US auto industry's union and three US car giants.
UAW officials also recently approved deals with General Motors and Chrysler, which will form the basis of new four-year labour contracts with the major Detroit employers.UAW officials also recently approved deals with General Motors and Chrysler, which will form the basis of new four-year labour contracts with the major Detroit employers.
Union members at both companies staged walkouts in protest against company proposals to radically reform workers' benefits, such as pension and healthcare, before the UAW was satisfied with the terms of a deal.Union members at both companies staged walkouts in protest against company proposals to radically reform workers' benefits, such as pension and healthcare, before the UAW was satisfied with the terms of a deal.
In contrast, there has been no industrial action at Ford.In contrast, there has been no industrial action at Ford.
Under pressureUnder pressure
The UAW and Ford will now be under pressure to make sure the car firm's union members approve the terms of the deal so that it can start introducing a massive turnaround plan designed to substantially shave costs and improve efficiency. Ford reported a record loss of $12.7bn last year and said this month that plans for the sale of its Jaguar and Land Rover brands were imminent as it steps up efforts to return to long-term profitability.
Ford reported a record loss of $12.7bn (£) last year and said this month that plans for the sale of its Jaguar and Land Rover brands were imminent as it steps up efforts to return to long-term profitability.
It had previously said that negotiations would be based on the framework of a hard-won UAW officials reached with rival Detroit-based carmaker General Motors.It had previously said that negotiations would be based on the framework of a hard-won UAW officials reached with rival Detroit-based carmaker General Motors.
This centred around shifting healthcare benefits to an independent fund, known as a Voluntary Employee Benefit Association, for retired workers and scaling back plant closures in the US to stem job losses.This centred around shifting healthcare benefits to an independent fund, known as a Voluntary Employee Benefit Association, for retired workers and scaling back plant closures in the US to stem job losses.
Ford had also emphasised the need to trim the $70 an hour it paid its workers in wage and benefits to a figure closer to that of Toyota's North American operations, while union officials said its goals were "to win new investment, to enhance job security and protect seniority"Ford had also emphasised the need to trim the $70 an hour it paid its workers in wage and benefits to a figure closer to that of Toyota's North American operations, while union officials said its goals were "to win new investment, to enhance job security and protect seniority"
"We made progress in all these areas," Bob King, the union's chief Ford negotiator, said in a statement.
Inevitable job cutsInevitable job cuts
Even so, it is thought the terms of the deal pave the way for Ford to shed between 8,000 and 10,000 factory jobs, though no firm details were available. It is thought the terms of the deal could pave the way for Ford to shed between 8,000 and 10,000 factory jobs, though no firm details were available.
This could prove contentious with workers, especially considering 27,000 union jobs had already been eliminated through voluntary redundancies and early retirement offers as of June.This could prove contentious with workers, especially considering 27,000 union jobs had already been eliminated through voluntary redundancies and early retirement offers as of June.
The US car market has been tough for all players, but particularly for Detroit's three major car manufacturers.The US car market has been tough for all players, but particularly for Detroit's three major car manufacturers.
They have been squeezed by rising costs and a shift away from gas-guzzling trucks and sports utility vehicles that have traditionally been the mainstay of these firms.They have been squeezed by rising costs and a shift away from gas-guzzling trucks and sports utility vehicles that have traditionally been the mainstay of these firms.