Ford buyout plan gets few volunteers

January 19, 2010

Ford buyout plan gets few volunteers


A buyout program Ford Motor is offering to its 41,000 hourly workers is yielding few interested volunteers, UAW officials told the Free Press this week.

The enrollment period for the program, announced Dec. 17, is schedule to expire Friday.

Ford has already cut its hourly workforce in North America by nearly half since 2005 through job cuts, plant closures and several earlier buyout programs.

Last spring, about 1,000 hourly workers, or just 2.4%, of Ford’s hourly workforce in the U.S. volunteered for a similar buyout offer.

“They’ve offered it so many times, the ones that wanted them already took them,” said Rocky Comito, president of UAW Local 862, who said only a handful of workers at two assembly plants in Kentucky that employ 5,800 have signed up for the buyout.

Ford is currently offering eligible production and skilled trades workers who accept early retirement or an employment buyout lump sum payments ranging from $20,000 to $50,000 and either a $25,000 vehicle voucher or a $20,000 payment.

But with Ford’s financial prospects improving and the possibility of finding another good-paying job in today’s economy grim, Ford’s latest buyout offer is viewed by workers as too small — especially at a time when Ford is gaining market share and reporting surprise profits.

“It doesn’t do much for people,” said Jeff Terry, president of UAW Local 228, which represents more than 2,000 workers at Ford’s axle plant in Sterling Heights.

If enough workers accept the offer, Nick Kottalis, president and chairman of UAW Local 600’s Dearborn Truck unit, said Ford might be able to bring some part-time workers back to work. But so far, he said, only about five workers had volunteered at Dearborn Truck Plant.

“It is very hard for an assembler with 10 years in to take a buyout,” Kottalis said.

Ford spokeswoman Marcey Evans said the majority of workers who volunteer for buyout programs typically make their decision during the final days of the enrollment period.

The offer, aimed at shedding an untold number of workers, comes after more than 70% of Ford’s hourly workers rejected proposed concessions to their labor contract in November.

Ford also gained market share in the U.S. in 2009 for the first time since 1995 and surprised Wall Street in November when it reported $1.8 billion in profit for the first nine months of the year.

Michael Ward, automotive analyst for Soleil Securities, said in a Dec. 21 report that a 10% take rate could help Ford improve productivity and, as automotive sales recover, give Ford the opportunity to hire new workers at a lower wage rate for the first time since it was established in a 2007 labor contract.

Ward also estimates that Ford can pay off the $50,000 to $75,000 buyout cost per worker in 18 months and help Ford limit labor costs.

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