Nov. 16 (UPI) -- United Auto Workers members ratified a new four-year contract with Ford Motor Co., the union announced.
The new deal was approved by 56.3 percent of Ford voting members, the UAW said in a news release Friday. Covered are hourly employees in Ford manufacturing plants in Michigan, Ohio, Kentucky, Missouri, Illinois and New York.
In all, there are 55,000 members who work for Ford, more than the two other U.S. automakers, General Motors and Fiat Chrysler.
Ford will incur $700 million in additional expenses in its fourth quarter under the new agreement, mainly tied to ratification bonuses, the company said in a news release.
"Every Ford employee and temporary employee will be at the top-rate for full-time status at the end of this four-year agreement," acting UAW President Rory Gamble, who is director of the UAW Ford Department said. "This is a life-changing contract for many and provides a template for all future Ford UAW members to a full-time, top-rate status. There will be no more permanent temporary situations and no more permanent tiers."
In the deal, full-time workers will receive $9,000 ratification bonuses, two 3 percent annual raises, two 4 percent lump sum payments and retain healthcare costs. Ford won't increase pension obligations or payments to retirees but will include a special retirement program that "will improve workforce composition, lowering labor cost," the company said.
Temporary employees will earn $3,500 bonuses. Ford will have increased use of temporary employees but there will be a guaranteed path to permanent full-time employment for them.
Ford will create or retain 8,500 U.S. jobs while investing in more than $6 billion in manufacturing operations in the United States. In return, Ford will close an engine plant in Michigan.
"I want to thank the Ford National Negotiating team and the many UAW staff and members who stood together and crafted a strong contract for both today's members and future members," Gamble said. "Ford's commitment to job security and assembly in the United States is a model for American manufacturers."
Ford is "pleased" the company could reach an "agreement quickly with the UAW without a costly disruption to production."
"This deal helps Ford enhance our competitiveness and protect good-paying manufacturing jobs," Gamble added.
The deal was similar to one reached last month by General Motors after a 40-day strike. GM projects to pay $4 billion in adjusted earnings before interest and taxes this year.
The union next has to reach a contract with Fiat Chrysler, which announced last month it is planning to merge with Peugeot. A merged FCA-Peugeot would be the fourth-largest automaker in the world behind Volkswagen Group, Renault-Nissan and Toyota.