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Ford meeting informally with UAW on costs

Ford meeting informally with UAW on costs

Wed Nov 4, 2009 7:40pm EST

By David Bailey

DETROIT (Reuters) – Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) will continue meeting informally with United Auto Workers leaders to discuss labor issues following the rejection of concessions by U.S. rank-and-file workers, a top executive said on Wednesday.

"We’ll sit down with the UAW and continue to have those discussions on how to make ourselves competitive and then go from there," said Mark Fields, Ford’s president of the Americas, who spoke to the Reuters Autos Summit.

In a departure from typical practice, UAW workers at Ford recently rejected a tentative agreement recommended by union leaders that would have broadly aligned costs with rivals General Motors Co GM.UL and Chrysler.

Local union officials said a "no strike" clause on wages and benefits rankled workers. UAW President Ron Gettelfinger told the summit on Tuesday that the agreement would have saved Ford about $30 million annually.

No new negotiations are planned between Ford and the UAW, but the UAW plans to try to convince Ford to maintain product commitments the automaker had made as part of the now rejected agreement, Gettelfinger said.

Ford, which posted a nearly $1 billion profit in the third quarter and $1.3 billion of positive cash flow from its auto business, has been focusing on global vehicle platforms to create economies of scale that will reduce unit costs.

The automaker, which unlike its two Detroit rivals has avoided filing for bankruptcy amid the worst economic downturn in decades, is on track to begin production of its Fiesta small car in Mexico for the North American market next year as part of that global strategy, Fields said.

Ford’s relative prosperity compared to rivals was seen as a factor in the defeat of the concessionary agreement.

Fields said the UAW agreement would have provided a "relatively small economic benefit" compared to concessions the UAW workers approved in February.

The February agreement, which also gave Ford flexibility in its method for funding retiree healthcare costs, brought Ford a long way toward parity with foreign-based automakers, he said.

"The modifications we recently sought were really designed to provide us with similar additional efficiencies as those that were ratified for GM and Chrysler," Fields said.

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