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Ford reaches provisional employment agreement with United Auto Workers union



DETROIT (Reuters) – Ford Motor ( UN ) and United Auto Workers union on Wednesday announced a tentative agreement for a new employment agreement, allowing US carmaker # 2 to avoid a strike like the one cost its larger rival General Motors ( GM.N ) about $ 3 billion.

FILE PHOTO: UAW President Gary Jones (L) shakes hands with Ford Motor Co Chairman Bill Ford at start of contract talks between union and car manufacturer in Detroit, Michigan, USA, July 15, 2019. REUTERS / Nick Carey

The union approached Ford to negotiate a new four-year deal after ratifying a contract last week with GM following a 40-day U.S. strike that closed nearly all of GM's North American operations.

Detailed terms of the agreement were not disclosed, but they are expected to reflect those agreed with GM, as the association typically uses the first agreement as a pattern for those who follow.

“The pattern negotiation strategy has been a very effective approach for UAW and its members to secure financial gains around wages, benefits and secured over $ 6 billion in major product investments in US facilities, and created and maintained over 8,500 jobs for our communities, "UAW Vice President Rory Gamble, leader of the Ford Department, said in a statement.

Ford confirmed the agreement in a statement but declined further comment.

UAW leaders from the various US factories meet Friday to approve the deal, which will then be sent to the 55,000 members at Ford for final approval, a union spokesman said.

Ratification is not a sure thing, as union members of Fiat Chrysler Automobiles NV ( FCHA.MI ) in 2015 rejected the first version of a contract.

On Monday, Ford and the UAW began discussions on major issues such as salary increases, the use of temporary workers and health insurance, but the union previously said the sides had made "significant progress" in addressing minor issues.

Ford has historically had an easier relationship with the Union than the Detroit rivals. Ford Executive President Bill Ford has described UAW as "family" in the past, and in September 2018, Dearborn, Michigan, paid tribute to the company's relationship with its hourly workers.

"Not only does UAW make our workers better, it makes Ford better and stronger," Bill Ford told UAW workers last year.

Under the agreement with GM, the automaker agreed to invest $ 9 billion in the United States, including $ 7.7 billion directly in its factories, and the rest went to joint venture companies. It also said it would create or retain 9,000 UAW jobs. The GM contract will also provide $ 11,000 signing bonuses to members and salary increases.

Under the agreement, GM will also close three plants, but that left UAW members' health insurance coverage unchanged.

Once the Ford agreement is ratified, the UAW will approach Fiat Chrysler to complete its quarterly annual talks with the Detroit automakers.

Reporting by Ben Klayman in Detroit, additional reporting by David Shepardson in Washington; Editing by Matthew Lewis and Kenneth Maxwell

Our Standards: The Thomson Reuters Trust Principles.

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