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Ford pact to even out labor costs with Toyota's

Post Time:Mar 12,2009Classify:Industry NewsView:176

Ford Motor Co. expects to cut its hourly labor costs to the levels of Toyota Motor Corp. and other foreign rivals with U.S. plants in two years thanks to union contract changes ratified this week.

The concessions, which trim benefits, change work rules and eliminate some pay increases, could save Ford as much as $375 million this year and $500 million or more in subsequent years, company officials said Wednesday.

The new terms cover 42,000 Ford workers represented by the United Automobile Workers. The agreement intensifies pressure on General Motors Corp. and Chrysler LLC, which need labor concessions by month's end to meet the terms of emergency U.S. government loans.

GM will get many of the same concessions as Ford although some terms will be different, UAW Vice President Cal Rapson wrote union members in a March 9 letter. The letter, a copy of which was reviewed by Dow Jones Newswires, didn't provide specifics but Rapson said the "economic" elements will follow the pattern set by Ford, according to a March 12 article in The Wall Street Journal.

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