Unionized workers at Ford voted on changes to their contract, including cutting cost-of-living increases, reducing benefits and eliminating cash bonuses.

The company says the move will help it to stay competitive. According to the UAW, 59 percent of production workers and 58 percent of skilled-trades workers voted “yes,” and the new contract passed.

No government loans

General Motors and Chrysler have both asked the government for quick loans to help their companies stay  afloat. Ford says these changes will prevent the company from having to ask the government for money as well.

“By working together with our UAW partners, we identified solutions that will help Ford reach competitive parity with foreign-owned auto manufacturers and that are important to our efforts to operate through the current economic environment without accessing a bridge loan from the U.S. government,” said UAW President Ron Gettelfinger in a written statement.

More contract details

The ratified deal ended the jobs bank program, and it now allows Ford to make payments in stock to a retirement fund. The fund will extend health benefits to retired workers.

Now the UAW must attempt to reach a deal with both Chrysler and GM.

Making an example

The deal UAW reached with Ford will serve as a guideline for deals with GM and Chrysler. In the agreements reached with the government over more than $17 billion in loans, it specifies that the companies must work out new agreements with the union.

The companies are seeking more funding from the government. In order to get it, Chrysler and GM have to bring their labor costs in down to the same level as foreign auto companies’ plants in the U.S.

Under terms of their loan agreements, progress must be made by March 31. The companies are seeking an additional $21.6 billion in government aid.