Working with the UAW

In November 2007, Ford workers represented by the UAW ratified a new collective bargaining agreement with Ford that includes significant innovative features to enhance productivity and reduce costs. The new agreement helps Ford to deliver on its key priorities, as it significantly improves Ford's competitiveness and allows the Company to continue to pursue its restructuring efforts.

In March 2009, Ford-UAW members ratified modifications to the existing collective bargaining agreement that significantly improved our competitiveness, saving us up to $500 million annually and bringing us near to competitive parity with the U.S. operations of foreign-owned automakers. The operational changes affected wage and benefit provisions, productivity, job security programs and capacity actions, allowing us to increase manufacturing efficiency and flexibility. In addition, modifications to the UAW VEBA Trust allowed for smoothing of payment obligations and provided us the option to satisfy up to approximately 50 percent of our future payment obligations to the UAW VEBA Trust in Ford Common Stock, resulting in savings of up to $6.5 billion. Further, Ford completed the transfer of its UAW retiree health care liabilities to the UAW VEBA Trust on December 31, 2009. See Ford's 10-K for more information.

On November 2, 2009, the UAW announced that a majority of its members employed by Ford had voted against the ratification of a tentative agreement that would have further modified the terms of the existing collective bargaining agreement between Ford and the UAW. These latest modifications were designed to closely match the modified collective bargaining agreements between the UAW and our domestic competitors, General Motors and Chrysler. Ford continues to operate under the 2007 UAW-Ford collective bargaining and modifications to that agreement. In addition, Ford has been participating in negotiations with the International Brotherhood of Electrical Workers (IBEW), which represents electricians at the Company's Cleveland manufacturing site.