Ford recently struck a deal with the United Auto Workers to allow further concessions to the union’s 2007 labor contract, and it appears the new accord will be quite cost effective for the Blue Oval. Early indications suggest the new deal will save Ford about $500 million per year.
According to Automotive News, the new agreement with the UAW will save Ford about $375 million in 2009, with the full $500 million being realized from 2010 on.
Roughly half of that savings will come from the suspension of bonuses and other employee payments, with break time reductions kicking in another $50 million in savings. The infamous UAW job bank has also been eliminated.
Ford will also shutter at least one more production facility, with further buyout plans to be offered in April.
Ford expects the changes to bring its labor costs in line with foreign automakers by 2011.
