Ford has said it expects operating savings of US$500m per year from an agreement with the UAW that will push hourly wage rates close to those of its foreign-based rivals with North American manufacturing plants.
The company said the agreement trims average wages and benefits for UAW hourly workers to about US$55 per hour this year, while the US operations of foreign-based automakers pay workers on average US$48 to US$49 per hour.
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Joe Hinrichs, Ford’s global head of manufacturing, said the annual savings could exceed US$500m if industry conditions allowed Ford to exercise all of the changes in the agreement.
About half of the annual savings would come from the elimination of performance bonuses and the Christmas bonus and the suspension of cost of living increases.
See also: US: Ford workers agree deal
