From Canadian Press

DETROIT - Ford Motor Co. said it expects $1 billion per year in extra cash flow once it shifts retiree health care costs to a union-run trust in 2010.

Ford also said it will have an additional round of buyout and early retirement offers, although the timing and size of the offers must be worked out with the United Auto Workers (UAW).

The retiree health care trust is part of the recently ratified agreement with the UAW, which shifts roughly $23 billion worth of U.S. hourly retiree health care liabilities to the trust, called a voluntary employees beneficiary association, or VEBA.

Ford said the $1 billion cash flow benefit estimate includes health care cost savings of $1.6 billion per year. In exchange for the cost savings, Ford will contribute $13.6 billion to the VEBA trust, including $2.7 billion in cash, $3.8 billion from an existing VEBA and two notes worth $6.3 billion that the company will take out to fund the trust.

The trust still must be approved by a federal court before its expected effective date of Jan. 1, 2010, the company said.

Copyright The Canadian Press, 2007