US – The collective bargaining agreement, which covers around 53,000 United Auto Workers (UAW) employees, confirms $9 billion of investments at the OEM’s plants in the country and secures or creates 8,500 hourly jobs. Ford says the new arrangement provides several opportunities to improve its overall productivity.

“This agreement enables us to further strengthen our business and continue investing in manufacturing in the US,” said Mark Fields, Ford president and CEO. “At the same time, the agreement aligns our labour-cost structure more closely with our competition and improves our manufacturing productivity and staffing flexibility.”

The agreement includes: an end to the cap on entry-level personnel; provision for the greater use of temporary employees; alternative work schedules, plus additional daily and weekly mandatory overtime; and the continuation of the existing Supplemental Unemployment Benefit deal, which enables the OEM to remain competitive in a downturn. Ford also said it would have the flexibility to “leverage” its global manufacturing footprint to enhance the cost-competitiveness of products it may sell in North America.

Furthermore, the vehicle-maker said it will now be “on a common footing” with domestic competitors because the four-year contract “effectively closes the labour-cost gap to General Motors and substantially narrows the gap to Fiat Chrysler Automobiles”. Including the ratification and lump-sum bonuses, the company calculates that its labour costs will increase by less than 1.5% per year. Ford will, however, incur a $600m expense this year, mostly in connection with the ratification.

The previous agreement between Ford and UAW, in 2011, promised the creation of 12,000 jobs in the country. The OEM says that, between 2011 and 2015, it actually added over 15,000 hourly jobs and invested $10.2 billion in its US plants.