DETROIT, USA

Ford Motor Company will pay its US factory workers a $6,000 signing bonus and add thousands of factory jobs as part of a four-year contract deal reached yesterday with the United Auto Workers (UAW) union.

Most Ford workers will get profit-sharing cheques instead of annual raises under the deal, starting with a payment of around US$3,700 this year. Workers will also get around US$7,000 in inflation protection and lump-sum payments over the life of the contract, the UAW said.

Ford plans to add 5,750 US factory jobs under the deal, on top of 6,250 it announced earlier this year, for a total of 12,000 jobs by 2015. It also pledged to invest US$4.8 billion in its US factories.

Ford union leaders approved the deal around noon yesterday after a meeting in Detroit. The deal is subject to a vote by Ford’s workers. Voting is expected next week.

If they agree to the contract, Ford’s 41,000 hourly workers will get US$1,000 more as a signing bonus than the US$5,000 bonus GM workers got under an agreement ratified last month. The GM agreement also gives most workers profit-sharing payments instead of annual raises and promises 6,400 new or retained jobs.

John Fleming, Ford vice president of manufacturing, said most of the 5,750 additional hires will be paid a lower wage than Ford’s older workers. The agreement is expected to lower Ford’s labour costs, which are the highest in the US auto industry. Ford currently pays most of its workers US$58 per hour in wages and benefits.

“The tentative agreement will enable us to improve our overall competitiveness here in the United States,” Fleming told reporters at Ford’s headquarters in Dearborn.

The contract raises Ford’s entry-level wage from US$15.51 per hour to US$19.28 per hour over the life of the contract. Ford currently has less than 100 entry-level workers, but will hire thousands more by 2015. Ford agreed to a lower wage for entry level workers in 2007 when the company was losing billions of dollars a year.

The deal will bring some production of the Ford Fusion sedan from Mexico to a factory in Michigan. It also will bring work to the US from China and Japan, Ford said. A plant in Kansas City, Missouri, will produce the Transit Connect commercial van, which is now made in Europe. Another plant in Louisville, Kentucky, will get a new, unnamed vehicle in addition to the 2012 Escape it was promised earlier this year.

Fleming said the US$4.8 billion in investments is in addition to US$1.4 billion previously announced, for a total of US$6.2 billion in investments over the life of the contract.

Approval of the contract could be a problem. There is some anger among Ford members about CEO Alan Mulally’s US$26.5 million pay package last year, and many Ford workers feel that the company is healthy enough to offer annual raises. Ford earned US$6.6 billion last year.

UAW leaders said the contract keeps Ford’s costs and prices competitive but allows workers to share in Ford’s profits.

“UAW members sacrificed when the company was struggling and now will share in Ford’s prosperity,” UAW Vice President Jimmy Settles said in a statement.

Up next is Chrysler Group LLC, where the talks could be more contentious. The company isn’t making as much money as Ford and GM and probably can’t afford the same deals. Chrysler and the UAW have set an October 19 deadline to reach a new contract agreement.

The UAW talks are watched closely because they set wages for more than 112,000 workers in the auto industry and set the bar for pay at auto parts makers and foreign-owned automakers.

Ford shares rose four per cent, or 37 cents, to US$9.74 in early afternoon trading yesterday. GM shares gained 52 cents, or 2.6 per cent, to US$20.25.

AP