Ford is proposing annual bonuses for union workers based on the company's performance as part of its effort to win better contract terms from the United Auto Workers in the third and final round of contract negotiations.

So far General Motors has reached an accord after a two-day strike and that was ratified by a majority of union members. Last week, Chrysler endured a six-hour strike before a deal far closer to GM's than expected was agreed and ratification is pending. Now it's Ford's turn in a process that one Detroit commentator last week told just auto was likely to be the "messiest".

A "person familiar with the situation" told the Detroit News the bonuses would be similar to those CEO Alan Mulally authorised in March to reward workers for their efforts to turn around the company's struggling US automobile operations. Ford reportedly wants to formalise the bonus system so hourly workers are judged by the same criteria as salaried employees.

The new system would replace the current profit-sharing formula, but Ford's workers would still receive the same annual lump-sum payouts that the UAW negotiated with General Motors and Chrysler, the paper said.

According to the Detroit News, if the bonuses become part of the Ford contract, it would represent a significant break with terms offered by GM and Chrysler, but Ford would also demand more in return - such as more restrictions on its jobs bank programme, which continues to provide pay and benefits to idled workers, and a retiree health care deal structured to give it as much relief as possible as fast as possible.

The paper speculated Ford maybe would make a lower contribution to a company-financed, union-run trust, known as a voluntary employees' beneficiary association, or VEBA, that would pay for retiree health care, seek different funding terms or push for a different mix of cash and stock.

The automaker also wants to make some provision for approximately 7,500 former Visteon workers that it agreed to take back as part of a 2005 bailout of its former parts subsidiary, and that is likely to involve another round of voluntary buyouts for UAW members, the report added.

The Detroit News said Ford had already been discussing these issues with union leaders - formally and informally - for 2 1/2 months, and executives hope they can avoid a strike like those that temporarily halted production at GM and Chrysler.

The UAW has yet to set a date for resuming formal negotiations with Ford and the automaker's executives want time to study the terms of the tentative agreement the UAW reached Wednesday with Chrysler and compare them with the GM contract that was ratified by union members the same day, the Detroit News said.