Ford and the United Auto Workers union have reached a tentative agreement on modifications to the Voluntary Employee Beneficiary Association (VEBA) retiree health care trust.
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“We are pleased with this agreement, which provides us the option to settle with Ford common stock up to 50 percent of the payments into the VEBA in lieu of cash,” said Joe Hinrichs, group vice president, global manufacturing and labour affairs at the automaker, in a statement.
“We will consider each payment when it is due and use our discretion in determining whether cash or stock makes sense at the time, balancing our liquidity needs and preserving shareholder value.”
The VEBA agreement – together with the agreement reached on 15 February to modify some operating provisions of the 2007 National Labour Agreement – is subject to ratification by UAW members at Ford.
The VEBA agreement also requires court approval.
“The agreements, if finalised, will allow Ford to become competitive with foreign automakers’ U.S. manufacturing operations, and are critical to our efforts to operate through the current deep economic downturn without accessing government loans and continue to fully invest in our ONE Ford product plan,” Hinrichs added.
