Ford ready to start union talks

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Carmaker Ford is ready to begin new contract talks with the United Auto Workers Union, after the UAW and General Motors reached a hard-won deal.

Ford boss Bill Ford said the firm was studying the details of the deal, but said the broad framework was "something we can work with", agency AP reported.

The key feature of the GM agreement is an independent trust to cover the cost of healthcare for retired workers.

Before the deal was reached UAW called its first national strike in 30 years.

The strike had centred on GM plans to reduce health and pension benefits.

The GM contract - which could also form the basis of negotiations with Chrysler - still needs to be approved by UAW's 73,000 members at GM. The union hopes it will get this approval by 10 October.

The voting so far indicates the deal should be accepted.

'Interesting model'

GM has agreed to pay $29.9bn (£14.6bn) into a fund, known as a Voluntary Employee Benefit Association, to cover the cost of health care for its retired workers.

"It's a model we find very interesting. Obviously it's something we will be discussing with the UAW," Ford was quoted by Associated Press as saying.

Analysts hailed the GM deal as a major breakthrough for the company, which is struggling to cut costs in the face of growing competition from Japanese rivals like Toyota.

Like GM, Ford is hoping to reduce costs as part of ongoing restructuring efforts.

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The UAW said the agreement with GM guarantees that new vehicles and models would be built in the US.

It added that GM had committed to a "total moratorium on outsourcing" its production facilities, which would help stem job losses in the auto giant's home market.

Job security had been a major sticking point in negotiating new contracts for the UAW members at GM, whose previous contracts expired on 14 September.

As part of the agreement GM said it would make 3,000 temporary workers permanent.

But it also said it would be able to hire new workers for non-core manufacturing jobs for about half the hourly rate of those working on the assembly line, creating fears of a "two-tier" system.