Ford Pushing Harder To Get Smaller
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 plan to get the troubled No. 2 automaker back in the black.
A Ford supervisor who was told of the plan by company officials says buyout and early retirement offers will also be made to entice 6,000 salaried workers to leave the company. The supervisor did not want to be identified because the plan has not yet been released.
The company is to reveal the details of its restructuring plan at a Friday morning news conference. But the first word of what's ahead for the 103-year-old American institution came late Thursday, in an announcement from the greatly impacted United Auto Workers union.
Ford hasn't said how many workers it hopes will take the offers, but it previously announced plans to cut up to 30,000 hourly jobs by 2012.
Ford began the year, reports CBS News correspondent Anthony Mason, with 82,000 employees, 6,500 of whom have already accepted buyouts.
When the dust settles, the change will be dramatic for the company that began as a daring adventure by Henry Ford and eleven business associates, with an investment of just $28,000.
"After this downsizing, Ford won't be the giant it once was," says auto industry analyst John Casesa. "It'll move from the 2nd largest manufacturer in North America to the third, fighting it out with the Hondas, Toyotas and Chryslers of this world instead of competing with General Motors."
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 quickly.
Under the buyout and early retirement plan for hourly workers, 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. Some packages require workers to give up health benefits.
Ford's board of directors, including new Chief Executive Officer Alan Mulally, Thursday wrapped up a two-day meeting in which they considered and approved the latest phase of the company's effort to reduce its size and its costs.
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.
The buyouts being offered 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.
"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."
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.
In July, the company pledged to accelerate its "Way Forward" restructuring plan, which when introduced in January and called for the up to 30,000 job cuts as well as closing 14 facilities by 2012.
Madden said her company expects Ford to announce the closing of two more plants. Ones that make truck-based sport utility vehicles and cars built on older platforms are likely to be closed, she said.
The scope of the buyout offer could indicate that more than two plants could be closed, Madden said.
Separately, Ford said that Anne Stevens, an architect of the restructuring effort at Ford and one of the auto industry's highest ranking women, is retiring. Stevens, 57, had been at the center of Ford's turnaround efforts since October 2005, when she was named executive vice president.