| Ford to Offer Buyouts
To All UAW Workers Details on Restructuring Are Due Friday By JEFFREY MCCRACKEN September 14, 2006 5:19 p.m. Wall Street Journal Ford Motor Co., under pressure to corral U.S. automotive losses, will offer buyout packages to all its roughly 75,000 U.S. hourly workers as part of a broader restructuring plan to be announced Friday that also is expected to include plans to cut salaried jobs and costs by 30% and accelerate plant closings, according to people familiar with the matter. Ford's previous North American overhaul plan, the Way Forward, unveiled in January, had proposed eliminating 30,000 hourly jobs, about 36% of total U.S. hourly workers, and 4,000 salaried jobs by 2012. Those cuts, and more, will likely happen several years sooner under the revised plan. Two senior Ford officials said the company now realizes that its stated goal of profitability in North America by 2008 is unrealistic, though it is unclear whether Ford will acknowledge that Friday. Ford has lost $1.3 billion in North America through the first half of the year, including $826 million in the second quarter. Ford's decision to offer all of its U.S. hourly workers incentives to leave the payroll follows a similar offer by General Motors Corp. that succeeded in slashing more than 34,000 people from the company's U.S. factory work force. GM executives say the larger-than-expected exodus has put GM on track to cut annual costs by $9 billion. For the United Auto Workers, Ford's decision to offer a companywide buyout plan represents another in a series of concessions to the crisis that has engulfed the Detroit auto giants. GM's U.S. hourly work force of 95,000 is just 39% the size it was in 1996, according to company figures. If Ford hourly employees respond to the buyout offers, the UAW could go into 2007 national contract talks with fewer represented workers at GM and Ford combined than it represented at GM alone in 1998. Ford is not expected to announce plans to kill any brands, such as its Mercury line in the U.S. Ford Credit, the company's consumer-finance arm, is expected to remain in the auto maker's portfolio. Some Wall Street analysts had argued Ford should consider selling a piece of Ford Credit and phase out Mercury. Ford is expected to give more details about product plans to allay concerns among investors that it has a weak pipeline and is replacing models more slowly than its rivals. A Ford spokeswoman declined to comment on the restructuring plan. Ford also said Thursday that two more senior executives in its Americas operation, Executive Vice President and Chief Operating Officer Anne Stevens and David Szczupak, group vice president of manufacturing, will retire. The restructuring deal had been rumored for weeks but was agreed to just this week, according to a UAW official. "Once again, our members are stepping up to make hard choices under difficult circumstances," the union's president, Ron Gettelfinger, wrote in a fax to UAW locals Thursday. Ford will match GM's buyout plan, which offered younger workers up to $140,000 each to leave the company and forgo their retirement health-care benefits. Ford will expand its current slate of offers, which range from $35,000 for workers with 30 or more years experience that can leave and keep their full retirement benefits to $100,000 for younger workers who leave the auto maker and walk away from retirement health care and Ford pensions. About 6,500 hourly workers have left the company, a figure Ford said should increase to 10,000 by year end. "Ford is realizing it's time to get real. They've got to take their lumps like GM did last year," said David Cole, president of the Center for Automotive Research, an auto-analysis firm in Ann Arbor, Michigan. Mr. Cole said the ability of Ford to negotiate new contracts with about 10 stamping and powertrain plants in the last few months, competitive operating agreements, may have limited Ford's need to close many more plants. Such agreements can save the auto maker 25% to 30% on labor costs, according to a UAW official, by allowing Ford to outsource more work or eliminate job classifications that required higher staffing levels. -- Mike Spector contributed to this article. Write to Jeffrey McCracken at jeff.mccracken@wsj.com5 URL for this article: http://online.wsj.com/article/SB115825406763263239.html |