DETROIT - Ford Motor Co. can no longer complain about being hamstrung by high labor costs preventing it from making money domestically.
The automaker's hourly workers yesterday ratified a historic four-year contract that sets lower pay for new hires and puts Ford's huge retiree healthcare liability into a trust run by the United Auto Workers.
The UAW represents about 54,000 Ford workers, and 79 percent of those voted in favor of the pact, the union said yesterday. The union typically does not release vote totals.
Workers at General Motors Corp. and Chrysler LLC already had ratified similar deals, with the contract passing at Chrysler by only a small margin.
The deals are historic because they will help to rescue the troubled Big Three and make them more competitive with Japanese rivals who build cars in the United States, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
Cole said his group's analysis of GM's contract shows it eventually may have a labor cost advantage over Toyota, its chief rival for the title of world's largest automaker by sales.
UAW president Ron Gettelfinger said the union negotiated a contract that protects wages, benefits, and seniority rights and provides income and secure healthcare for retirees.
"We stood our ground in the face of some rather big asks by the company and came away with a creative agreement that addresses the concerns of our members and also gives the company the opportunity to move forward," he said in a statement. "Now it's up to Ford to successfully bring to market the top-quality vehicles our members are building in UAW Ford factories."
The UAW said production workers voted 81 percent in favor of the deal, while skilled trades workers were 71 percent in favor.
"The agreement is fair to our employees. It respects our employees. And the agreement is going to allow us, going forward, to make a really significant improvement in our competitiveness," Ford president and chief executive Alan Mulally told reporters at the Los Angeles Auto Show.
In addition to the active workers, the deal covers more than 94,000 Ford retirees and 28,000 surviving spouses. It will run until Sept. 14, 2011.