Ford offers 54,000 buyout packages
Published: Friday, January 25, 2008 at 6:01 a.m.
Last Modified: Thursday, January 24, 2008 at 8:24 p.m.
DEARBORN, Mich. - Ford Motor Co. will offer buyout and early retirement packages to 54,000 U.S. hourly workers in an effort to cut costs and replace those leaving with lower-paid workers. Thursday's announcement came as Ford said it narrowed its losses in 2007 but warned that the outlook for U.S. sales in 2008 remains grim.
Non-skilled workers with at least 30 years of service, or whose age and years of service equal 85, or who are 65 or older with one year of service can get a $50,000 payment to retire early; skilled workers can get $70,000.
Workers near retirement age can go on paid leave until they retire.
Three packages will pay for either a four-year education and 50 percent of salary; two-year education and 70 percent of salary; or $100,000 for college.
Workers can also get a check for $100,000 or $140,000, depending on their time with the company.
Ford President and Chief Executive Alan Mulally said the automaker will also trim salaried staff, mostly through attrition but possibly through layoffs, as it tries to adjust to a slumping U.S. market. Ford said its U.S. market share will be at the low end of a 14 percent to 15 percent range in 2008, down from 14.8 percent in 2007 and 26 percent a decade ago. Ford fell behind Toyota Motor Corp. in U.S. sales last year, ceding its 75-year position as the nation's No. 2 auto seller behind General Motors Corp. "We are going to match our production capacity to the real fundamental demand," Mulally said during a conference call with Wall Street analysts and media.
Ford lost $2.8 billion, or $1.30 per share, in the fourth quarter, narrower than a loss of $5.6 billion, or $2.98 per share, in 2006. The full-year loss of $2.7 billion, or $1.35 per share, was significantly better than 2006, when Ford lost $12.6 billion, or $6.72 per share.
Mulally said Ford remains on track to make a profit in 2009, but is expecting another loss in 2008.
"Overall, our plan is working and we continue to show progress," Mulally said.
Mulally said the United Auto Workers agreed to two rounds of buyouts for hourly workers. The first will be offered immediately to fewer than 1,000 remaining workers who had been employed at already closed plants in Atlanta, St. Louis, Edison, N.J., and Norfolk, Va. Those offers close the week of Feb. 28 and employees would leave the company by March 1.
The second round of buyouts would go to workers at all other U.S. Ford locations, opening Feb. 18 and closing the week of March 17. Mulally said those workers would likely leave the company starting April 1, with all of them gone by year's end.
The buyouts come in addition to a 2006 round of buyouts in which 33,600 U.S. hourly workers left the company. This time, they could be replaced with lower-wage workers.
Under Ford's new contract with the UAW, signed in November, Ford can pay new workers $14.20 per hour, or about half the wages of a current worker. Under the contract, up to 20 percent of Ford's U.S. hourly work force may be paid at the lower wages.
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