Although Ford has managed to side-step any government funding, it is still focusing on cutting costs – particularly those associated with the UAW. Just last week Ford reached a tentative labor agreement with the UAW and today announced an agreement involving retiree healthcare.
Although neither side released specific details on the agreement, modifications were made to funding requirements to the Voluntary Employees’ Beneficiary Association, or VEBA for short. Under the new agreement, Ford can make up to 50 percent of its required VEBA payments with common stock.
“We will consider each payment when it is due and use our discretion in determining whether cash or stock makes sense at the time, balancing our liquidity needs and preserving shareholder value,” Joe Hinrichs, Ford group vice president of global manufacturing and labor affairs, told Automotive News.
The UAW is expected to review and approve the proposed VEBA changes this week, but a court approval will also be required.
