Ford offers buyouts to UAW workers

Ford offers buyouts to UAW workers


DETROIT (Reuters) -- Ford Motor Co. said Monday it is offering its 41,000 U.S. factory workers buyouts and early retirement offers in a bid to reduce its payroll costs as it aims to return to profit by 2011.

The buyouts mark the second round of such offers for Ford workers represented by the United Auto Workers union. About 1,000 workers took the automaker's earlier offer in July.


Ford workers have until late January to accept the offer, which include payouts of up to $70,000 cash for newer hires to $60,000 cash for veterans already eligible for retirement.

"Despite a strengthening in our business, we still have a surplus in employees," said Ford spokesman Mark Truby.

Ford did not provide a target for how many workers it expected would take the offers.

The only U.S. automaker to have steered clear of a taxpayer bailout and bankruptcy in the past year, Ford's relatively stronger position compared with its domestic rivals has complicated a bid to win new concessions from its major union.

Last month, UAW workers overwhelmingly rejected a proposed cost-cutting deal for Ford that would have changed the terms of a labor contract which runs until 2011.

General Motors Co. and Chrysler have also used buyouts to reduce their U.S. factory work force. Each went through bankruptcy and was recapitalized by U.S. taxpayers.

Ford (F, Fortune 500) has said it wants to ensure that its own labor costs remain competitive.

Under the terms of the new buyouts, Ford workers with at least a year of experience will be eligible for a payout of $50,000 plus a new car voucher worth $25,000 or an additional cash payment of $20,000.

Workers eligible for retirement will be able to draw pension payments and take either the $25,000 voucher toward a new Ford vehicle or the $20,000 payment.

In addition, retirement eligible workers with a skilled trade can receive $40,000 cash. Other workers would be paid $20,000 as an incentive to retire. Workers who accept the offer would leave the company between February 1 and March 1, Truby said.


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Michigan, where the unemployment rate was 14.7% in November, has the highest jobless rate in the United States.

Over the past decade, the U.S. auto sector has seen employment drop by over half to 547,500 workers as of June, according to government data.

By reducing the number of older workers on their payroll, all three U.S. automakers aim to create room to hire new workers at sharply reduced wages when they need to increase production.

New UAW hires at the Detroit automakers will make $14 per hour compared with an average about $28 per hour for older workers under a round of concessions granted by the union.

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