Posted on 03/09/2009 2:06:12 PM PDT by Abathar
DETROIT -- Unionized workers at Ford Motor Co. have approved contract changes that include freezing wages and cutting benefits in a move to aimed at helping the automaker remain competitive.
The United Auto Workers said Monday a majority of hourly workers voted in favor of modifications to the 2007 contract with Ford, eliminating cost-of-living increases and cash bonuses.
The UAW said 59 percent of production workers and 58 percent of skilled-trades workers voted for the concessions.
"By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers and that are important to our efforts to operate through the current economic environment without accessing a bridge loan from the U.S. government," said UAW President Ron Gettelfinger in a written statement.
(Excerpt) Read more at theindychannel.com ...
Ah Mikey...
In this deal was a proviso that the union take 50% of the "VEBA" payment ( The Legacy find the union will run ) in Ford Stock.
So.....
That liability is 13.2 Billion. so half is 6.6 Billion.
Now my question is this, Volvo is on the block for sale. what if they get close to the 6 billion for it? Do they take that cash and use it to maintain liquidity, or do they make up the difference to the half way point and fund the VEBA with the sale of Volvo and Company Stock and get rid of that liability?
For the record I thought that one out on my own....
Also they are trying to restructure bond holder debt , a haircut of 28 cents on the dollar for stock if my memory is correct.
I am just an observer here, but IMHO they could be trying to cleanup of the liability part of their current accounting equation/balance sheet dilemma, and that might be a good thing.
If you would like to be added or dropped from the Michigan ping list, please freepmail me.
How old are you? Don’t you get Medicare?
Well taildragger we have seen this play before with GM.
At my last company I told our CEO three years ago that GM had sold Ditech.com and that as a tier 1 we should prepare for the worst.
It didn't matter if they were playing chicken with the UAW or clearing the decks for Chapter 11, for us not to have a plan would be foolish.
I will never forget what he said.
He told me that the UAW was the largest stockholder in GM and would not let Chapter 11 happen.
I was shocked. What a moron.
They have since closed 2 plants and the stuff has not hit the fan yet.
I
Not old enough for medicare, I’m 63. When I’m old enough my employer requires that I get it and it becomes my primary provider and my premiums will be reduced, I don’t remember how much reduced but I thik it is by about a third.
You make good points via your personal experience.
Ford's relationship is much better historically with the UAW. Where this may work vs. a tier supplier is this. We are at an annual rate of 9 to 10 million in car sales. Local financial guru's on Paul W. Smith's Program note that we may see a repeat of 1982 where pent up demand went from the 9 to 14 million mark. Imagine with GM and C-LLC on the skids and folks looking to purchase American default to Ford. What if they get 1 million units? What if they are making $1,000 a car? that is a billion not in earnings but in revenue.
At that point the UAW is in a win-win should they decide to cash out part of their VEBA portfolio and diversifiy.
Lot of ifs, and everyone has double-downed on some high risk/reward options. Let us hope they work....
Thanks for the ping. I’m hoping I swayed a few votes to the right side.
“If vendors were ranked in terms of cost, BCBS would be Ford’s #1 vendor. Put otherwise: health-care costs more per unit than steel.”
I understand and agree with you overall point that legacy costs, especially attributable to retiree health care, are very high. That said, I have to nit pic on this specific statement. I’m highly doubtful that HC costs would be higher than a per unit cost of steel, especially if you consider the subtier suppliers.
Nit picking done.....
Cue up a great American country classic . . .
Right. Looks like Ford — and its employees — have an approach that might offer the best hope for success among the Big Three.
By posting personal info like that, I hope to enlighten some about "golden retirement benefits" of UAW retirees.
It's not my only source of income or I would not have retired.
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