American automotive giant Ford has announced that it has, in principle, agreed to a four year pay contract with the union United Auto Workers. The deal will, according to the firm, make the Ford brand more competitive in its home market.

Precise details have been kept under wraps until members of the UAW have had time to look over the proposed contract. The firm has already announced plans to invest an extra 3.1 billion pounds into its American production facilities by 2015. It also intends to create 5,750 jobs over the same period.

The plans also include transferring work that is currently carried out in China, Mexico and Japan back to the United States; this is an unusual move, since manufacturing in such locations is often much cheaper than doing so in a western country like the USA. The new targets for creating jobs are in addition to 7,000 new positions that Ford previously pledged to introduce by the year 2012. As part of the new deal, workers will receive better profit share bonus sums, according to the UAW.

A similar deal was announced just a week after General Motors agreed to a similar deal with the UAW, under which GM agreed to pay a $5000 bonus simply for signing the new agreement, together with an additional $1000 a year aimed at covering the effects of inflation. It is expected that the Ford deal will reflect some of these key elements.

All major US car firms have experienced improved sales and profits in recent times, following high profile bailouts of the likes of GM and Chrysler by the US Government – the equivalent of financial vehicle recovery by the state.