United Auto Workers officials have urged hourly workers at Ford to approve concessions intended to cut operating costs and cash outlays.


UAW officials representing factory workers from Ford facilities across the United States met on Tuesday in Detroit and voted unanimously to recommend ratification of the contract changes, the union said in a brief statement. They also voted to complete ratification votes on the new contract by 9 March.


Ford has said the cost-saving changes negotiated midway through a four-year contract with the UAW set to run until 2011 were needed to allow it to restructure on its own without resorting to emergency loans from the US government, Reuters noted.


General Motors and Chrysler also have reached tentative agreements on new operating concessions with the UAW but are still in talks with the union about how to change funding terms for retiree healthcare.


Ford has beaten its rivals with the announcement that it had clinched its own deal with the UAW on the issue of how to restructure its remaining obligations for retiree healthcare.

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Under the proposed change to the Ford contract, which is subject to both UAW ratification and court approval, the automaker has the option of settling up to half of the payments due to a retiree healthcare trust fund in Ford stock.


Previously, Ford had been obligated to make a US$13.2bn cash contribution to the fund, known as a Voluntary Employee Beneficiary Association, or VEBA.


Ford’s deal with the UAW on the VEBA would save it almost US$7bn in cash and could provide the model for concessions at GM and Chrysler, analysts have told Reuters.


Ford and the UAW have not yet detailed the other contract changes that will be put to unionised hourly workers for a ratification vote, Reuters noted, adding that both sides have said one of those changes will phase out a programme of near total job security for UAW workers even after their positions have been eliminated.


US automakers and the UAW have also been talking about contract changes that would make it easier for the companies to hire in new, lower-cost workers and shut down excess plants, people familiar with the talks have told the news agency.


Ford had just under 53,000 hourly workers in North America at the end of December, down from over 100,000 at the end of 2005.