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Ford and UAW may reach deal fairly quickly: analysts

Thu Oct 11, 2007 6:33pm EDT
 
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By Poornima Gupta and David Bailey

DETROIT (Reuters) - Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz), considered the weakest of the three U.S.-based automakers, could agree on a new contract with the United Auto Workers union fairly quickly and without the strikes that marked negotiations with General Motors Corp and Chrysler LLC, analysts said on Thursday.

The UAW and Chrysler reached tentative agreement Wednesday on a four-year pact that protects wages, pensions and health care for UAW-represented Chrysler workers and retirees, ending a six-hour strike at most of the company's U.S. plants.

The agreement followed the pattern of a ground-breaking deal the UAW reached with GM (GM.N: Quote, Profile, Research, Stock Buzz) last month to end a two-day nationwide strike.

"The expectation is that having agreements cemented with GM and Chrysler, that they are probably pretty far along with Ford," Fitch Ratings managing director Mark Oline said. He expects a relatively smooth path toward agreement on wages and a health-care trust.

Among the Detroit-based automakers, Ford is seen as the least capable of absorbing a costly strike. The company lost $12.6 billion last year, and lost an industry-worst $770 on every vehicle it sold worldwide.

The automaker has put up most of its automotive assets as collateral to raise $23.4 billion to fund a restructuring that includes shutting 16 plants and cutting more than 45,000 jobs.

Job guarantees and investment commitments are likely to be the real focus of Ford's talks with the UAW, Oline said.

A person familiar with the negotiations said Ford wants to see deeper cost cuts in its labor deal and is uncomfortable with the pattern set by the GM contract on job security and product commitments to U.S. plants.  Continued...

 
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