DETROIT (AP) – Ford Motor Co. no longer can complain about being hamstrung by high U.S. labor costs that prevent it from making money domestically.
The automaker’s hourly workers on yesterday ratified a historic four-year contract that sets lower pay for new hires and puts Ford’s huge retiree health care liability into a trust run by the United Auto Workers.
The UAW represents about 54,000 Ford workers, and 79 percent of those voted in favor of the pact, the union said Wednesday. The UAW typically does not release vote totals.
Workers at General Motors Corp. and Chrysler LLC already had ratified similar deals, with the contract passing at Chrysler by only a small margin.
The deals, all similar, are historic because they will help to rescue the troubled Detroit Three and make them more competitive with Japanese rivals who build cars in the U.S., said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
“It’s just a recognition we’re at a brave new world. The business model has changed. The benchmark has shifted to the international manufacturers,” Cole said.
The companies said going into the talks they have about a $25-per-hour labor cost gap with Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.