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Ford pays workers to quit { September 15 2006 } Original Source Link: (May no longer be active)
http://www.indystar.com/apps/pbcs.dll/article?AID=/20060915/BUSINESS/609150417/-1/ZONES04http://www.indystar.com/apps/pbcs.dll/article?AID=/20060915/BUSINESS/609150417/-1/ZONES04
September 15, 2006
Ford to its workers: We'll pay you to quit
Troubled automaker to offer buyout packages of up to $140,000 to all U.S. hourly employees
Star and news service report
Struggling automaker Ford will offer early-retirement packages to all of its 75,000 U.S. hourly workers, including about 2,000 at the Indianapolis steering-systems plant, United Auto Workers officials said.
Ford confirmed the news Thursday, saying it is accelerating its corporate restructuring in the wake of huge losses. Ford hasn't said how many workers it hopes will take the offers, but it has previously announced plans to cut up to 30,000 hourly jobs by 2012.
The retirement package would provide from $35,000 to $140,000 for each worker, depending upon their years of service and age. Depending on which plan is chosen, workers may have to give up health benefits.
The deal would open the way for cash-strapped Ford to begin hiring a new work force paid less than the current UAW scale of $27 an hour.
Ford's deal would follow the exodus touched off early this summer when 35,000 General Motors and 18,900 Delphi autoworkers accepted early-retirement offers.
Ford, the nation's second-biggest automaker, will reveal further details of a restructuring plan this morning that likely will include additional plant closings.
It was not clear Thursday whether the Indianapolis plant might be affected by the closures. Industry analysts have said the Eastside plant, formerly owned by Visteon, is critical to Ford because the company has no other major source of steering systems in North America.
The factory, which employs about 2,200 hourly and salaried workers, has been up for sale as part of a Ford subsidiary called Automotive Components Holdings.
Ford, GM and Delphi have long been Indiana industrial pillars, but they are all shedding plants and workers as market share recedes in the face of strong foreign competition.
In the meantime, Japanese automakers Toyota and Honda are putting new assembly lines in Indiana that, combined, will employ more than 3,000.
In offering early-retirement plans to its workers, Ford is trying to cut costs as its sales shrink under fierce competition from more fuel-efficient models from Asian automakers.
The UAW announced the early-retirement proposal in a statement to its members Thursday, saying the offers are available to all active Ford workers represented by the union.
"Once again, our members are stepping up to make hard choices under difficult circumstances," UAW President Ron Gettelfinger said in a statement. "Now, it's Ford Motor Co.'s responsibility to lead this company in a positive direction, which means using the skills, experience and dedication to quality that UAW members demonstrate every day in order to deliver quality vehicles to customers."
The buyouts are part of a larger restructuring plan approved by the Ford board of directors during a two-day meeting that ended Thursday.
The Detroit News, citing an internal report prepared by Ford finance officials, said the company is projecting a 2006 loss from ongoing operations of $5.6 billion to $5.9 billion.
Ford shares fell 10 cents to close at $9.09 on the New York Stock Exchange. Its shares have traded in a 52-week range of $6.06 to $10.09.
Separately, Ford said Anne Stevens, an architect of the restructuring effort, and North American manufacturing chief David Szczupak will retire.
Ford lost $1.4 billion during the first half of the year and is under pressure from Wall Street to make further cuts and roll out new cars and trucks more quickly.
In July, the company pledged to accelerate its "Way Forward" restructuring plan, which, when introduced in January, called for cutting up to 30,000 jobs and closing 14 facilities by 2012.
Ford recorded the largest net loss in its history in 1992, $7.4 billion, but most of it was due to accounting changes. Ford also posted a $5.5 billion net loss in 2001, in part due to a restructuring plan.
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