Ford pitches buyouts hard

Workers told it’s their last chance for deal

Bryce G. Hoffman / The Detroit News

Ford Motor Co. is launching an unprecedented marketing campaign to sell as many workers as possible on the latest — and, it says, last — round of nationwide buyouts.

The Dearborn automaker is eager to take advantage of a key provision of its new contract with the United Auto Workers union that allows it to pay new hires half what current workers earn.

Still, Ford says it will not hire any new workers until next year. The company must first make room for thousands of former Visteon Corp. workers it agreed to take back as part of a 2005 bailout of its former parts subsidiary. Ford also wants to further reduce its North American factory head count to better match capacity with an expected decline in vehicle sales this year.

"We see this as the last big enterprise-wide buyout," Joe Hinrichs, Ford’s global manufacturing chief, said Wednesday. "It’s important for people to understand that. This is their last chance."

To make sure as many workers as possible head for the exits, Ford is sweetening some of its early retirement packages and offering new plans designed to help entrepreneurs start their own businesses. It is holding career fairs at plants and factories across the country, and hooking workers up with prospective employers, as well as franchise chains, trade schools and universities. It is also targeting workers with paycheck inserts and a DVD that features profiles of former Ford workers who found success after leaving under the last round of buyouts.

All of this is being done with the full support and cooperation on the UAW.

"We understand that the company has got to be viable for our membership to be viable," UAW Vice President Bob King told The Detroit News on Thursday. "It’s the most humane way to reduce the work force in a time when you’ve lost market share and volumes are down. We’re trying to get the softest landing possible for people."

King, who heads the union’s national Ford division, said the UAW is working with the company "on a daily basis" to keep its North American turnaround plan on track. Ford, which lost $2.7 billion last year, has set a goal of returning to profitability in 2009.

Another successful buyout round is seen as critical to achieving that. Some 34,000 hourly workers have already left the company through buyouts and attrition since the end of 2005, leaving Ford with about 54,000 UAW-represented employees. While Ford has not set any specific buyout targets, sources at the company told The News the company hopes to convince between 8,000 and 10,000 workers to sign up for one of the buyout packages.

Both General Motors Corp. and Chrysler LLC are also offering buyouts to hourly employees.

UAW President Ron Gettelfinger said Thursday that the weak economy could make buyouts at GM a tough sell. That also could be the case at Chrysler, which has informed some workers at its Jefferson North Jeep plant in Detroit that layoffs related to a temporary shutdown are now indefinite, at least until workers considering buyouts decide whether they will leave the automaker.

Buyout options will be offered

During the last round of buyouts in 2006, Ford offered workers eight packages, ranging from a lump-sum payment of $100,000 and six months of medical benefits to an educational opportunity grant that covered workers’ tuition for up to four years while still providing half their pay and full medical benefits.

"We’re doing more of the same, plus," said Marty Mulloy, vice president of labor affairs at Ford. "We sat down with our employees and talked to them about what other options they were interested in."

As a result, Ford is now offering two new programs for workers interested in going into business for themselves. Under the terms of that offer, Ford will give eligible workers $50,000 in cash and continue to provide full health benefits for them and their dependents for five years. Alternatively, workers can opt to receive just major medical benefits for seven years, as well as $50,000.

Ford is also upping the ante for its 12,000 retirement-eligible employees. Instead of the $35,000 it offered last time around, it will now pay those workers $50,000 to leave the company with full retirement benefits. On top of that, skilled trades workers will receive an additional $20,000 for a total payout of $70,000.

"We’re also currently investigating additional tax-efficient ways for our employees to receive their special retirement incentive," Hinrichs said Thursday, following an announcement by GM that it will let workers invest all or part of cash incentives in tax-deferred accounts.

At former Visteon factories, Ford is being even more aggressive. It is offering workers there the same packages, but also offering cash incentives to employees who agree to stay on with the new companies once those sites are sold.

So far, only one production line at one of the former Visteon plants in the United States has been sold. Workers at that facility, in Monroe, are being offered $140,000 — payable in three payments over two years — to accept positions at Neapco Drivelines LLC, which purchased the driveshaft line in January. Those who do will continue to receive the same wages and benefits for the life of the current contract.

Ford spokeswoman Marcey Evans said similar offers will be extended to workers at other former Visteon plants that are sold by year’s end. Those that are not sold will be closed.

Because the fate of many of those facilities is still undecided, Ford does not plan to hire any new permanent workers until 2009. Ford currently has 5,200 hourly employees working at these facilities. Only after it has found jobs for all of the former Visteon workers who wish to stay at Ford will it begin hiring new workers under the two-tier wage agreement with the UAW.

Ford to clear out job bank

Ford will also use the openings created by these buyouts to empty out its jobs bank, which continues to provide full pay and benefits to employees who have been idled.

Most of the 665 workers still in that program were employed at five factories that Ford shuttered as part of its restructuring. They have until Feb. 19 to sign up for one of the buyout offers or accept a transfer to another plant. Those who do not will be placed on a leave of absence without pay or benefits on March 1.

For other workers, the sign-up window will run from Feb. 19 to March 18.

Wall Street would rather see Ford hold off on hiring than exercise its option to hire lower-wage second-tier workers, said analyst Bradley Rubin of BNP Paribas.

"They’ve got to right-size their capacity," he said. "When they’re at the point that they are on skeleton crews and everybody’s working overtime, that’s when you start to bring the tier-twos in."

Ford is hoping the success of ex-employees like Brian Gorman will convince workers to sign up.

He agreed to give up his job at Ford’s Livonia Transmission Plant in September in exchange for a lump-sum payment of $100,000. He used the money to open his own restaurant — Southern Smoke BBQ and Grill in Garden City.

"I absolutely love it. I wouldn’t change my decision for anything," said Gorman, who had always dabbled in catering and counts many current Ford workers among his customers. "I explain to them that it’s not easy doing this and it isn’t easy leaving, but if you actually have a plan and you can stick to it, there really is a life after for Ford."