Ford said to eye new job cuts

Report says another round of salaried job cuts are due to be announced as soon as Friday; ex-Congressman Gephardt to help Ford's talks with UAW.
September 11 2006: 6:59 AM EDT
NEW YORK (CNNMoney.com) -- Ford Motor Co. could announce a new round of salaried job cuts as soon as Friday, according to a published report.

The Detroit News reported Monday that Ford (Charts) will start by offering voluntary buyout packages and early-retirement incentives to white-collar workers.

While the nation's No. 2 automaker expects to achieve headcount reduction targets through voluntary programs, involuntary layoffs are likely to follow in some areas if too few workers take advantage of the incentives, according to the report.

Ford, which has between 35,000 and 40,000 U.S. salaried employees, announced earlier this year that it was trimming 4,000 salaried positions as it tries to stem losses in its core North American auto operations.

Ford spokeswoman Marcey Evans would not discuss Ford's plans.

"We don't comment on speculation, nor do we comment on any business that we're taking before the board," she told the News.

The Ford board is set to meet Wednesday and Thursday. The company is expected to announce further steps in its turnaround plan originally announced in February, when it said it would cut 30,000 hourly positions and close 14 plants by 2014.

Wall Street is looking for the company to speed up those plant closings and hourly staff cuts, perhaps following the lead of General Motors (Charts), and offering all the union-represented employees retirement incentives or severance packages to leave the company sooner rather than later.

"Ford has 87,000 hourly workers. If 86,000 were to leave, the market would be ecstatic," Bradley Rubin, an analyst with BNP Paribas, told the paper.

Gephardt working with Ford unions, execs
The News also reported that former Democratic congressman and presidential candidate Richard Gephardt, a long-time ally of labor unions, has become a key behind-the-scenes player in Ford's efforts to trim its costs.

The paper said Gephardt will serve as a special adviser and consultant to Ford through next summer's contract negotiations with the United Auto Workers.

Gephardt told the paper he is working with Ford to find creative solutions to its labor costs issues.

"We're trying to use some innovative ideas to try to square the circle," he said.

The paper reported that Gephardt also helped recruit Boeing Co. (Charts) executive Alan Mulally to become the new CEO of Ford, a position he was named to last week.

The paper said that in 2005, soon after Gephardt left office, Mulally hired him to help with Boeing's tricky labor negotiations with the machinists union in the summer of 2005. In September 2005, Boeing reached a deal to end a month-old strike by the International Association of Machinists, as Mulally and IAM President Tom Buffenbarger worked out a deal in talks attended by Gephardt.

Earlier in 2005, Gephardt helped investors buying Boeing plants in Wichita, Kan., and Tulsa, Okla., secure a labor deal with the airplane maker's machinists' union. He now serves as a director of the company formed after that purchase, Spirit AeroSystems Holdings.

Is an outsider the right person to save Ford?

 

I would say that an outsider is exactly what the company needs. If an insider was what they needed, then they would have turned around a long time ago. They need new ideas. The company needs to make some cost cuts so then they have enough money to revitalize their line-up. From what I have heard, Lee Iacocca had to cut wages for a while until he got Chrysler's car line-up revitalized.

 

Ford to Offer Buyouts to All UAW Workers, Union Official Says

Thursday , September 14, 2006 (Fox News)

DETROIT — Ford Motor Co. plans to expand buyout and early retirement offers to the company's entire U.S. hourly work force of 75,000 as part of a broader restructuring plan aimed at restoring the troubled No. 2 automaker to profitability.

One day before Ford was to detail the huge restructuring plan, the move was announced Thursday afternoon by the United Auto Workers union. 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 announcement came just after Ford's board of directors, including new Chief Executive Officer Alan Mulally, wrapped up a two-day meeting to approve the restructuring plan designed to cut costs in light of slumping sales.

But the UAW statement only fueled anxiety in Ford plants and offices across North America as workers braced for the announcement of further cuts scheduled for Friday morning.

Catherine Madden, an auto industry analyst at the consulting company Global Insight Inc., said although not all 75,000 workers will take the packages, the size of the offer illustrates the magnitude of Ford's troubles.

"No matter what, the number reflects the pressure the Ford Motor Co. is under right now," she said. "That's how significant the mounting pressures are on Ford."

The offers also show a realization of Ford's troubles by the UAW, which said in a statement that it agreed to the packages due to the "extraordinary circumstances in the domestic auto industry."

Ford had about 82,000 workers represented by the UAW at the end of last year, but about 6,500 have taken previous buyout and early retirement offers made mainly at plants already slated for closure, company spokeswoman Marcey Evans said Thursday.

UAW President Ron Gettelfinger said its members have made hard choices under difficult circumstances.

"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," Gettelfinger said in a statement.

Ford has been battered by the auto market's shift from trucks and sport utility vehicles to more fuel-efficient cars and crossovers. Its market share and sales have dropped while its Japanese competitors have gained.

Under the buyout and early retirement plan, detailed in a UAW statement, workers can choose among eight packages that offer from $35,000 to $140,000 depending on their years of service, age and how close they are to retirement age.

"I think it's a good package," said Chris Kimmons, president of UAW Local 919 at the Norfolk, Va., assembly plant. "I think they worked real hard on it. They've got to do something to help Ford out of this crisis."

Depending on which plan is chosen, workers may have to give up health benefits.

The offers are similar to those made earlier this year to hourly workers at the General Motors Corp., where 35,000 people have agreed to leave the company. Ford is the second-largest carmaker in the U.S. after GM.

The announcement also came as UAW local leaders at Ford plants gathered in Detroit to discuss Ford's financial situation and the buyouts.

The Ford board meeting wrapped up Thursday afternoon and the company issued a statement saying it would announce details of the restructuring in a news release at 7 a.m. Friday, followed at 9 a.m. by presentations to employees and the media.

Mulally, who was hired away from Boeing Co. just last week, attended the board meeting and will be part of Friday's announcements, the company said.

Ford lost $1.4 billion during the first half of this year and is under pressure from Wall Street to make further cuts and roll out new cars and trucks more qui

 

I'd take it in a heart beat if I worked for Ford. By having this option available, I would take the money and invest in starting a rental property business. At least they get something out of it.