The UAW has said its members are willing to make painful sacrifices as workers at Ford voted to accept changes to their contracts and other benefits.
The changes include freezing wages, eliminating cost-of-living increases as well as some paid holidays and bonuses.
The deal, which is aimed at helping the firm remain competitive, also involves a new funding arrangement for a health care trust.
Ford’s rivals GM and Chrysler will now face pressure to do similar deals.
Ford is the first US carmaker to come to an agreement with the UAW.
The union said 59% of production workers and 58% of skilled-trades workers voted for the agreement.
“We are facing an unprecedented loss of sales and revenue at Ford,” said UAW Vice-President Bob King.
“The voting results show that our members are prepared to make painful sacrifices in order to be part of the solution to the problems facing Ford and the US auto industry.”
The deal will also save Ford billions of dollars in health care costs. The company will now pay up to half of its obligation to a trust fund for retired workers in stock rather than cash.
Ford said that the deal will help Ford reach competitive parity with foreign-owned auto manufacturers as well as help it to continue to operate through the current economic environment without accessing a bridge loan from the US government.