Employees learned of the changes Tuesday in a letter from Mark Fields, the newly appointed head of Ford's Americas division. The letter and an informational packet describing the changes were obtained by The Detroit News. A similar packet was mailed to salaried retirees, Ford said.

In his letter, Fields said the benefit changes were necessary as Ford prepares its "way forward" turnaround plan that could eliminate as many as 30,000 hourly jobs and shutter at least 10 factories in North America over the next five or six years. Ford already has announced plans to cut about 4,000 salaried positions in North America by the end of March.

"Achieving the goals detailed in the plan is absolutely critical to our future and will require tough decisions, including addressing the rising costs of health care," Fields wrote.

The white-collar health care cutbacks announced internally Tuesday will be followed today by details of a tentative deal struck between Ford and the United Auto Workers to raise health insurance costs for blue-collar workers and retirees. The agreement still must be ratified by UAW members.

Taken together, the cuts represent another blow to the cradle-to-grave benefits that have been the pride of the U.S. automobile industry for the better part of a century.

According to Fields' letter and the accompanying materials, active salaried workers who opt for the Ford Medical Plan will continue to avoid monthly premiums, but their annual deductibles will increase by nearly 17 percent. Those who select an alternative health plan will see their monthly premiums go up by 30 percent on average, while their annual deductibles will rise 33 percent.

On the positive side, employees will see improved preventive care benefits and have access to a pre-tax health savings plan that can help them manage medical costs.

Ford also is moving to restrict the number of dependents of workers and retirees on its health care rolls. The automaker will begin charging $110 a month for health insurance and $11 a month for dental coverage to employees whose spouses or same-sex domestic partners want Ford coverage but are eligible for non-Ford health insurance. The automaker also is restricting benefit eligibility for the stepchildren of employees whose other parent is required to cover the cost of their health insurance.

At the same time, Ford is eliminating an annual $50 bonus payment to workers that they could use to help offset out-of-pocket health care costs.

Ford will cap health care spending for retirees and their surviving spouses at the average 2006 level. After that, any increases in insurance premiums will have to be paid entirely by the retirees or their survivors.

With the cost of health care rising at double-digit rates nationwide in recent years, the change could mean significant out-of-pocket expenses for retirees on fixed incomes.

"That could really take a bite," said James Brazin, a Ford engineer who retired after more than 33 years at the automaker's transmission facility in Livonia. "I'm very concerned about it. It's rather unfair. They had an agreement (with the retirees), and they keep changing it."

Ford also will cap retiree life insurance benefits at $50,000 and eliminate a program that provided a vehicle allowance to the survivors of mid- to high-level management retirees after they died.

For active workers, one noticeable change will be in their paycheck. The average merit pay increase for white-collar workers in 2006 will be 2 percent -- down from 3 percent this year. The raises will be determined based on workers' job performance and their salary relative to other employees at the same level.

Ford said the changes affect salaried employees and retirees in the United States. The company has about 40,000 salaried workers in North America, including those in Canada and Mexico. It pays health benefits for some 550,000 white-collar workers, blue-collar workers, retirees, spouses and dependents.

The cutbacks come as Ford struggles with declining market share and rising financial woes. Ford lost $284 million in the third quarter worldwide. In North America, its losses soared to $1.2 billion.

"The company continues to face increasing pressure to maintain high-quality benefits for employees while also trying to hold down escalating costs," said Ford spokeswoman Marcey Evans. "The changes we're making are going to help us manage those costs."

General Motors Corp. said it has no plans to cap health care costs for its retired salaried employees. However, GM will increase out-of-pocket health costs for white-collar workers and retirees in 2006. Those employees, who have been paying 27 percent of their medical expenses, will foot 31 percent of those bills next year.

A recent survey showed that three-fourths of companies nationwide have asked retired workers to pay a higher share of insurance premiums in the past year.

The study by the Kaiser Family Foundation, a nonprofit health care policy group, and human resource consultant Hewitt Associates found that 86 percent of companies said they planned to increase the amount retirees pay for health insurance in the next three years.

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