Ford Of Canada Announces Three-year Contract With Caw Four Months Before Deadline

* Three-year collective bargaining agreement covering more than 9,000 employees reached after unprecedented bargaining process.
* Employees ratify the unique-to-Canada deal four months before the current contract expires on September 16, 2008.
* Base wages remain stable during the life of the contract and a ’new hire’ wage rate is established for first three years of employment.
* Escalation of cost-of-living allowances is moderated to increase competitiveness.
* Production at the St. Thomas Assembly Plant, near London, Ont. is extended by one year to 2011.

For the first time in its history, Ford Motor Company of Canada, Limited has reached a collective bargaining agreement with the Canadian Auto Workers (CAW) more than four months before the current contract expires. Ford employees represented by the CAW ratified the new deal in a vote held today.

The early settlement brings stability to Ford’s operations as it prepares to launch the new Ford Flex crossover vehicle at the Oakville Assembly Complex, which also builds the Ford Edge and Lincoln MKX. Ford recently announced plans to add 500 positions to increase production at the Oakville plant due to high demand for the Ford Edge and Lincoln MKX, and to prepare for the start of production of the Ford Flex.

“This agreement is the right solution for the Canadian marketplace. The terms recognize the importance of our employees’ contributions and improves the competitiveness of the Canadian operations,” said Stacey Allerton Firth, vice president, human resources, Ford of Canada.

“It’s a credit to the relationship we have with the CAW that we were able to reach a responsible agreement in record time. Both the union and the company realized that we had to work collaboratively, with complete transparency, in order to find innovative solutions to the challenges facing the industry,” she added.

Highlights of the agreement include:

* Each CAW-represented employee receives a $2,200 productivity and quality bonus upon ratification to recognize their efforts in helping Ford become one of the best in the industry in product quality.
* Cost-of-living allowance (COLA) payments are frozen for the next 16 months. Quarterly COLA adjustments resume in December 2009.
* Effective immediately, a unique wage rate has been established -- during the first three years of employment, new employees earn 70% of base wages, COLA payments are suspended, and Supplemental Unemployment Benefits (SUB) and time-off provisions are phased in. After three years, employees receive 100% of base wages and benefits.
* Health care savings generated through a new 10% co-pay program for prescription drugs and a cap on long-term care provisions.
* A 40-hour-per-year reduction in vacation pay, offset by a $3,500 cash payment in January 2009.
* Production at the St. Thomas Assembly Plant, near London, Ont. is extended by one year to 2011.