Chairman says automaker interested in health care fund
October 4, 2007
BY SARAH A. WEBSTER
FREE PRESS BUSINESS WRITER
Ford Motor Co. Executive Chairman Bill Ford indicated on Wednesday that leaders at the company founded by his great-grandfather are generally satisfied with the tentative contract rival General Motors Corp. reached with the UAW.
It is expected to serve as a pattern for the Ford deal.
"The broad framework is certainly something we can work with," Ford told journalists during an appearance in Chicago. He was there for a ceremony to start a national network of community-based high schools, which is being supported by the automaker.
Ford spokesman Mark Truby confirmed the comments, which were first reported by Dow Jones, although he emphasized that the company still is studying the deal.
Ford and crosstown rival Chrysler LLC agreed to an indefinite extension of the current contract after GM was named a strike target Sept. 13.
GM and the UAW reached a deal Sept. 26 after a two-day strike, and the union's 73,000 members at GM continue voting on the proposed contract.
The UAW is expected to resume talks with Ford and Chrysler when the GM-UAW tentative contract is ratified.
Bill Ford, who learned labor relations early in his career from former Vice Chairman Peter Pestillo, seems to have good relations with UAW President Ron Gettelfinger, who started his career at a Ford factory in Louisville, Ky., and was head of the UAW's Ford division prior to leading the entire union.
During his Chicago trip, Ford said the company is "very prepared to get going" in talks.
He also said that the automaker is interested in talking to the union about a voluntary employee beneficiary association, or VEBA. That form of union-supervised trust to manage health care for UAW retirees is set to save GM about $20 billion from its $50 billion in related liabilities.
J.P. Morgan Chase estimates Ford's UAW retiree health care liability at $22 billion, indicating possible savings for Ford of $9 billion from a GM-style VEBA.
Bill Ford's comments were notable in that they contrasted with industry experts' recent comments that Ford may need more -- or significantly different -- concessions than those GM won from the UAW.
For Ford, the specifics of the GM agreement could force it to provide greater clarity about its turnaround plan, which aims to make the North American division profitable by 2009, Arthur Wheaton, a labor expert from Cornell University, said last week. Ford lost $12.6 billion last year and is undergoing a restructuring.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, said he expects that Ford, when it reaches a deal with the UAW, will disclose the six remaining of 16 plants it plans to close as part of its restructuring. Another large benefit of the proposed contract for GM is the savings related to replacing current workers in noncore jobs with lower-paid union members.
But Ford is ahead of GM in outsourcing noncore jobs, said John Casesa, a veteran auto analyst and managing partner of Casesa Shapiro Group LLC.
Over the past two years, the UAW approved what are known as competitive operating agreements at Ford plants that allowed noncore jobs to be subcontracted out at lower pay. UAW Vice President Bob King said that saved $750 million.
Casesa said the UAW will have to give a different deal to Ford and to Chrysler LLC if it wants to help the companies survive.
"Ford's financial situation remains fragile," Casesa said last week. "Because the main feature of the agreement is relief on health care for retirees and GM has the highest active-to-retiree ratio, it's disproportionately better for GM," he said.
GM provides health benefits to more than four retirees and surviving spouses for every active worker it employs. Ford's ratio is two retirees for each active worker, and Chrysler's ratio is about one-to-one.
Contact SARAH A. WEBSTER at email@example.com.
Posted on October 5, 2007
Henry Ford Learning Institute Launches National Network of Community-Based High Schools
The Henry Ford Learning Institute (HFLI) has announced grants from the Ford Motor Company Fund and the Bill & Melinda Gates Foundation totaling $11.5 million to launch a national network of small high schools modeled after the Henry Ford Academy in Dearborn, Michigan.
The investment will provide underserved students in urban areas with quality, real world learning environments, a college-preparatory culture, and demanding academic standards. The Henry Ford Academy: Power House High, scheduled to open in Chicago in 2008 in the former Sears Roebuck building, will be the first school in the expanded HFA network. The academy is part of Chicago Public School's Renaissance 2010 initiative, which is working to develop or transform one hundred schools in the city by 2010. In addition, the new academy's curriculum will use the renovated building's "green" features to enhance lessons on the environment, clean technologies, and sustainability.
The $8.5 million investment by the Ford Motor Company Fund, which includes $1.25 million for support planning and operations at Power House High, will help HFLI build the new network of schools. The $3 million grant from the Gates Foundation will support the launch of five new HFAs, including Power House High, in urban communities in the Midwest.
All future academies in the network will be located in prominent public spaces such as cultural institutions, community organizations, or universities, providing students with a content-rich and visible learning experience that is often lacking in traditional school models. Each academy also will be customized to meet local needs and take advantage of each school's unique location and community partners. Partnerships with local employers, including Ford Motor Company and the Chicago-based Siemens Building Technologies, will give students exposure to future work opportunities through internships and other important workplace and learning experiences.
"Ford Motor Company Fund and the Bill & Melinda Gates Foundation share HFLI's core belief that all students can achieve at high levels when they are provided with quality educational experiences," said HFLI executive director Deborah Parizek. "These grants support the development of sustainable learning environments — public schools in public spaces that involve community partners, localize a proven academic program to incorporate local resources, and make public education a truly public endeavor."
“Henry Ford Learning Institute Launches National Network of Community-Based High Schools.” Bill & Melinda Gates Foundation Press Release 10/03/07.