Ford & UAW Come to Agreement Terms

Ford Motor Company (NYSE:F), one of the leading automobile manufacturers has managed to reach a tentative agreement with the United Auto Workers union earlier today.

The agreement for a period of 4 years allows the automotive company to make investments worth $ 5 billion in its United States plants and create job opportunities for another 5750 jobs on hourly basis. The company has also agreed to pay $ 6000 as signing bonus to the employees along with $ 3,700 in additional profit sharing according to the tentative agreement according to sources.

When contacted, Ford Motor Co. declined to give any answers regarding how this agreement is going to affect the company’s fixed costs, but it did say that this new contract will allow Ford to get more work into the United States from other countries like Mexico, Japan and China.

After the shares had fallen to a two year low, it surged up by about 3.2 percent to $ 9.67 in the afternoon. There was tremendous pressure on the auto shares since late spring due to the slowdown in global economy.

While talking to reporters, the head of Ford’s global manufacturing, John Fleming said that the company is pleased with the agreement as it is going to improve the company’s competitiveness in United States. The tentative contract between Ford Motors and United Auto Workers is yet to be ratified by 41,000 workers representing the United Auto Workers union. The agreement is to be reviewed and approved by the officials of United Auto workers union representing Ford’s plants  in a meeting to be held in Detroit .

If the deal is ratified, the company will create 12000 hourly jobs in the united States by 2015, said the company. Jimmy Settles, the vice president of United Auto Workers union said that the negotiated contract between both the parties will allow the company to maintain competitive fixed costs and product prices and at the same time increase the profit sharing with the workers. Out of the 12000 proposed jobs, 7000 has been previously announced by the company which will also include 750 white collar jobs. Whereas the remaining jobs will be created at the entry levels, said the company.

Currently about 6 percent of employees in Ford motors Co. working on hourly basis are earning entry level wages which amounts to $17 per hour. Unskilled workers from the union are paid an average of about $28.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.