Report: Ford, UAW to offer buyouts to workers

Troubled carmaker could lose $9 billion this year, officials estimate
MSNBC News Services


Updated: 12:18 a.m. PT Sept 14, 2006

DETROIT - Ford Motor Co. and the United Auto Workers union are planning to offer buyouts to all the company’s 75,000 U.S. workers, the Wall Street Journal reported on its Web site today.

The program appears to be similar to a buyout plan offered by General Motors to about 110,000 hourly workers earlier this year. About 30,000 G.M. workers took up the offers.

According to CNBC’s Phil LeBeau, Ford is likely to draw down its blue collar work force by about 40 to 45 percent in its restructuring program tomorrow morning. That’s about 35,000 of its 75,000 UAW members. Ford will cap the number of people who will take these offers.

The plan is to get as many people as possible to quick leave the company’s payrolls said LeBeau.

The nation's troubled No. 2 automaker, will announce a long-anticipated restructuring plan Friday, the company announced Thursday.

The plan, which is expected to include more plant closings and employee layoffs, will be detailed in a statement scheduled to be released at 7 a.m. EDT, the company said. Executives will offer more details in presentations to the media and employees beginning at 9 a.m.

Ford executives are estimating the company could lose up to $9 billion this year including the costs of the restructuring plan, a newspaper reported Thursday.

The Detroit News reported that chief financial officer Don Leclair’s office has said in a financial forecast report that Ford’s global automotive operations will post a pretax loss of $5.6 billion to $5.9 billion this year.

Once restructuring costs are factored in, the loss could widen to $9 billion, the newspaper said, citing a senior Ford official who it said had firsthand knowledge of the report. The report said most of the loss would come from Ford’s North American operations, the newspaper said.

Ford sales have suffered in North America as the auto market shifts away from trucks and truck-based sport utility vehicles and toward more fuel-efficient models often made by Asian automakers.

Ford announced in January that it would cut up to 30,000 jobs and close 14 facilities by 2012, but company officials said they are working on a plan to speed up the restructuring. Ford's board of directors has been meeting this week to approve the latest details of the plan, known as the "Way Forward."

Ford recently hired Alan Mulally, a former Boeing executive, as its new CEO, replacing Bill Ford Jr., the great-grandson of the company founder, who remains executive chairman of the company.

Company spokeswoman Becky Sanch said Ford would not discuss the report: “Those aren’t numbers that we shared, and we’re not commenting,” she told The Associated Press on Thursday.

The report comes as Ford’s board of directors was to meet for a second day Thursday to discuss another round of restructuring that likely is to include more plant closures and job cuts.

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

Separately, a report in Thursday’s Detroit Free Press says Ford executive Anne Stevens, one of the architects of the initial “Way Forward” restructuring plan and the highest-ranking woman in the automotive industry will step down.


Stevens has worked at Ford since 1990, and her plan to leave the ailing automaker is one of several crucial pieces in play as a revised rescue mission gets underway for the 103-year-old automaker, the newspaper reported.

In July, the company pledged to accelerate its “Way Forward” restructuring plan, which when introduced in January called for cutting up to 30,000 jobs and closing 14 facilities by 2012.