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DETROIT (MarketWatch) -- Ford Motor Co. (F) said Thursday that unionized workers at its Michigan Truck Plant approved a critical agreement that is expected to lead to millions of dollars in cost savings thanks to changed work rules and the outsourcing of some jobs that typically are performed by United Auto Workers.
Workers at the plant, which employs 2,600-plus blue-collar workers, voted in a plan that will have them working four days a week and 10 hours a day. The agreement - which is the latest in a series of plant-by-plant "Competitive Operating Agreements," or COAs - allows Ford to outsource some jobs to non-UAW workers and authorizes certain changes in work rules.
Ford began negotiating COAs in 2006 as part of its wider "Way Forward" restructuring agenda. The UAW says the COAs, which were forged at several plants last year, saved Ford $750 million in 2006.
In a phone interview Thursday, Ford's North American manufacturing chief, Joe Hinrichs, applauded the move.
"We're going to keep working with the UAW to what it takes to make these plants competitive," he said. The executive insisted that "you never stop until you're No.1" and said that reaching an optimal cost structure is like chasing a moving target.
Ford spokeswoman Anne Marie Gattari confirmed that a majority of votes cast on the issue at Michigan Truck were in favor of the agreement.
Hinrichs also said that an additional COA has been agreed upon at another plant in North America, but he declined to name the plant. That plant's workforce will eventually vote on the agreement.
Workers at Wayne, Mich.-based Michigan Truck, which builds large SUVs, are currently working on one shift due to sluggish demand for its products. Like many of the nation's auto workers, the plant's employees may be facing wage and benefit cuts that are said to be necessary to help Detroit's Big Three compete more effectively with Asian auto makers.
Ford, along with General Motors Corp. (GM) and DaimlerChrysler AG (DCX), is set to negotiate a new master contract later this year. Ford's COAs are seen as an additional measure of cooperation between the UAW and the auto maker.
Ford lost $12.7 billion in 2006 and it is working to lower its North American labor costs in addition to other restructuring measures. It expects to return to profitability by 2009.
Ford had initially expected the UAW to hold a vote on the COA at Michigan Truck last month, but a dispute over potential bonuses being paid to white-collar workers led to a cancellation of the vote.
In an interview earlier this week, Local 900 President Jeff Washington said union officials and Ford management are "still discussing (bonuses) and we're trying to work through that discussion." But Washington, who represents the workers at Michigan Truck, said that his plant has to "get the ball rolling" on an agreement with Ford because the plant will not be a part of new-product plans until a COA is reached.
UAW officials could not be reached for comment on Thursday.
The vote at Michigan Truck follows on the heels of a major restructuring announcement at Chrysler, which lost $1.5 billion last year. The No.3 U.S. auto maker intends to cut 13,000 jobs over the next three years and is in talks with the UAW in an effort to soften the blow for 9,000 unionized workers in the U.S. who lose their jobs under the plan.