Join Date: Feb 2001
Location: The Hills of North Georgia,USA
U.S.A.:Ford's pension expense grows.Bonuses, car deals increase obligation
November 14, 2003
BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER
Ford Motor Co.'s new 4-year contract with the UAW will add $1.2 billion to its pension obligations, the Dearborn automaker said in a filing with the Securities and Exchange Commission.
The U.S. labor contract, which runs to September 2007, is the first since 1967 that does not include an increase to the regular monthly pension benefit for existing retirees.
But it does include $800 annual bonuses and $1,000 new-car vouchers in two of the four years of the contract.
General Motors Corp. told investors last month that the contract would add $2 billion to its pension obligations.
In Thursday's filing, Ford said it expects the retiree bonuses and other cost increases, such as bonuses and wage increases for current workers, would be offset by other savings, such as plant closings and job cuts.
In a similar filing, GM said the retiree bonuses and vouchers would result in a fourth-quarter charge of $1.2 billion, or $725 million after taxes.
Ford has said it will spread its similar costs over the life of the contract.
Ford also reiterated that it is negotiating with Visteon Corp., its largest supplier and former parts division, to improve its overall competitiveness. But the changes, if any, would hinge in part on the result of Visteon's negotiations with the UAW to set lower wages for new hires.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....