Washington - A top labour union on Monday approved changes in its contract with Ford Motor Co that could save the struggling carmaker billions of dollars and set the stage for similar deals with General Motors Corp and Chrysler LLC.

The United Auto Workers said its members ratified the new labour agreement, which includes cuts in salary and health benefits, to help keep the carmaker alive amidst the worst economic downturn in decades.

GM and Chrysler, which have received 17.5 billion dollars in emergency government loans and are fighting hard to stave off bankruptcy, are in similar talks with UAW.

All three carmakers have suffered declines in sales as high as 50 per cent in the last few months. Ford is the only one of the so- called Big Three that has not yet sought a government bail-out.

"Once again UAW members have stepped up to make the difficult decisions necessary to deal with the reality of the current economy," UAW President Ron Gettelfinger said in a statement, urging other groups such as bondholders and executives to make similar sacrifices.

Ford's deal would help the carmaker achieve "competitive parity" with foreign manufacturers that have lower labour costs and should keep it from seeking a government bail-out, said Joe Hinrichs, who heads Ford's labour affairs.