23rd Dec 2005 07:00
Ford Motor Co22 December 2005 Contact: Media: Investment Shareholder Community: Inquiries: Marcey Evans Terry Huch (Equity) 1.800.555.5259 or1.313.322.9211 1.313.594.0613 [email protected] [email protected] [email protected] Rob Moeller (Fixed Income) 1.313.621.0881 [email protected] FORD AND THE UNITED AUTO WORKERS REACH HEALTH CARE AGREEMENT DEARBORN, Mich., Dec. 22, 2005 - Ford Motor Company today announced that itstentative agreement with the United Auto Workers (UAW) to reduce the Company'shealth care costs has been ratified by the Ford-UAW membership. The agreement, which is currently pending court approval, calls primarily formodifications to the Company's hourly retiree health care plan, while continuingto allow Ford to provide a competitive benefits package for hourly employees andretirees. "Ford is pleased to have reached an agreement with the UAW on the increasinglyimportant issue of health care," said Joe Laymon, Ford Motor Company group vicepresident, Corporate Human Resources and Labor Affairs. "This agreement wouldnot have been possible without the leadership of UAW President Ron Gettelfinger,UAW Vice President, National Ford Department, Gerald Bantom and Ford MotorCompany Vice President, Labor Affairs, Marty Mulloy." Much like the recent General Motors health care agreement with the UAW, Ford'sagreement includes contributions to an independent Defined ContributionVoluntary Employee Benefit Association (VEBA) that will be used to subsidize thecost of retiree benefits. This VEBA will be funded through specified companycontributions over the course of the next several years -$30 million in 2006,$35 million in 2009 and $43 million in 2011 - as well as through active hourlyemployee contributions through deferrals of portions of future wage and Cost-of-Living Adjustment (COLA) increases. Also as part of the agreement, Ford has committed to invest $900 million overthe course of the next five years for projects related to innovation and newtechnology. This commitment would not have been possible without the savingsFord expects to realize through the UAW health care-related agreement. Overall, the agreement is expected to provide an average annual net corporatesavings of about $650 million on a pre-tax basis, including reduced health careexpenses and the impact of the VEBA contributions. Cash savings are projected tobe about $200 million per year. Ford estimates the agreement will result in anoverall reduction in its retiree health care (OPEB) liability of about $5billion. "This agreement not only helps us to address the rising costs of health care, itwill allow the Company to commit resources to strengthen its pledge toinnovation at the same time," said Laymon. "This further demonstrates that theUAW truly is our partner as we continue to work together to tackle the issuesfacing the domestic automotive industry today." # # # Ford Motor Company, a global automotive industry leader based in Dearborn,Mich., manufactures and distributes automobiles in 200 markets across sixcontinents. With nearly 325,000 employees and 110 plants worldwide, thecompany's core and affiliated automotive brands include Aston Martin, Ford,Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-relatedservices include Ford Motor Credit Company. For more information regardingFord's products, please visit www.fordvehicles.com. Go to http://media.ford.com for news releases and high-resolution photographs. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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