Ford Motor Co has pledged to spend $9 billion over four years in new investment in the United States if a tentative contract with the United Auto Workers (UAW) union is ratified by UAW Ford workers, people familiar with the deal said on Friday.
Full details of the investment pledge were not provided by the sources, but they said that a plant in Wayne, Michigan, will receive new product to build and will remain open. There was some concern of the plant's future after Ford four months ago said it would pull production of two small car models from the plant.
The proposed contract also would give workers $10,000 in bonuses once the pact is ratified, the sources said. That would consist of an $8,500 ratification bonus and a pull-ahead amount of $1,500 in a 2016 profit-sharing bonus so the workers can have the extra money before the holidays, the sources said.
The sources wished to remain anonymous because the union and company have not released details of the proposed contract.
Ford will also offer $70,000 per worker in retirement incentives to some eligible workers, the sources said.
Earlier on Friday, the union and Ford announced that a tentative agreement had been reached for the company's 52,700 UAW members. The pact will go to a worker ratification vote as early as next week.
Fiat Chrysler Automobiles, in its deal with the UAW, pledged to spend $5.3 billion in its U.S. operations in the four years of its contract.
GM pledged to the UAW that it would invest another $1.9 billion over the four-year contract, which is on top of two separate investment announcements made before labour talks began in July. One was for $5.4 billion over the next three years at various locations and a second for $1 billion at the company's primary technical center near Detroit.
The Fiat Chrysler contract set the pattern for the end of a two-tiered wage structure at all three of the Detroit automakers. The two-tiered system, in place since 2007, paid newer workers less than veteran ones and did not offer a path to second-tier workers to top pay.
All of the investment pledges are contingent on market demand.
The ratified contract at Fiat Chrysler, and the ones yet to be ratified at GM and Ford, each call for new UAW production plant hires to make about $17 per hour and over an eight-year span reach top pay, which will be about $30 per hour at the end of the four-year pacts in 2019.