Reply #60: Ford health-care deal fails to stir investors [View All]

[54anickel]

http://today.reuters.com/business/newsArticle.aspx?type=ousiv&storyID=2005-12-23T163252Z_01_FOR359526_RTRIDST_0_BUSINESSPRO-AUTOS-FORD-HEALTHCARE-DC.XML

DETROIT (Reuters) - Ford Motor Co.'s (F.N: Quote, Profile, Research) agreement with the United Auto Workers union to cut the automaker's multibillion-dollar health-care costs fails to excite investors, analysts said on Friday.

Blue-collar workers at Ford on Thursday narrowly ratified a deal that Ford said will allow it to cut about $650 million of its estimated $3.5 billion annual health-care expense. The UAW had originally said Ford would save $850 million.

"Pretax savings appears to be less than what we expected," said Bear Stearns analyst Peter Nesvold in a note to clients, adding that GM appears to have gotten a better deal.

"The pretax benefit of Ford's deal appears to be 25 percent of existing annual expense vs. 54 percent at GM," Nesvold said.

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Guess the worker's aren't bleeding hard enough yet