Ford Motor Co
The agreement with the UAW, which workers ratified earlier in March, allows Ford to suspend some performance and bonus payments, reduce overtime costs and cut a paid holiday, as well as restructure funding of a union retiree healthcare trust.
Joe Hinrichs, Ford's global head of manufacturing, said the savings from the operating agreement and restructuring of the funding of the trust, a Voluntary Employee Beneficiary Association, was critical to our future competitiveness.
The annual savings could exceed $500 million if industry conditions allow Ford to exercise all of the changes in the agreement, Hinrichs said in a conference call with analysts and reporters.
Ford, which posted a record $14.7 billion net loss for 2008, has said it believes it has adequate liquidity to operate through the economic downturn without seeking emergency U.S. government loans.
(Reporting by David Bailey; Editing by Lisa Von Ahn)