Ford workers OK wage freeze; GM, Chrysler could follow

DETROIT -- Union workers at Ford Motor approved contract changes including a wage freeze and a cut in benefits to help the automaker be competitive.

The deal is expected to be a model for Chrysler and General Motors, which must bring their labor costs in line with foreign-owned U.S. auto plants as a condition for their federal loans. They've received $17.4 billion and asked for $21.6 billion more.

Ford has not sought government loans, but said that it did not want to be at a disadvantage should its Detroit competitors negotiate lower labor costs.

"By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers," said Ford's Joe Hinrichs, a group vice president.

UAW President Ron Gettelfinger said in a statement, "Once again UAW members have stepped up to make the difficult decisions necessary to deal with the reality of the current economy, the deteriorating auto industry as a whole and specifically the negative impact the economic climate is having on Ford."

The UAW pact also allows Ford to use company stock for up to half of its payments due to a new union-run trust that is taking over responsibility for retiree health care. Ford owes $6.3 billion at the end of this year.

UAW base wages remain the same, but the deal limits pay laid-off workers get in addition to their unemployment benefits and ends the controversial "jobs bank" that let some workers collect nearly full pay when laid off.

"Now the pressure is on to get a similar agreement at GM and Chrysler. Time is running out," said Aaron Bragman, an auto analyst for consulting company IHS Global Insight in Troy, Mich.