Ford Offers Incentives for Early Retirement

All 41,000 U.S. hourly workers for Ford Motor Co. are being offered retirement incentives or buyout packages so that the factory workforce can be reduced. Ford has been the only one of the Big Three automakers to survive without government bailout money or bankruptcy protection, but it is struggling against lagging sales and still has more workers than needed for the current production needs according to spokesperson Mark Truby.

Truby couldn’t report on the amount of workers who are expected to take advantage of the incentive packages, which include cash and vouchers for cars and short term health coverage. We’re just going to try to right-size our manned capacity and align it with demand, says Truby.

Ford has laid off a total of 634 blue-collar workers. Under the new United Auto Workers Union contract, the workers will get a portion of their pay on a scale depending on seniority. They will receive another portion of their wages for another year after that before they are permanently removed from the company’s payroll.

This system is different from the ˜jobs bank’ that laid off workers received pay from indefinitely, regardless of factory operation status. The UAW agreed to do away with the bank in light of the financial troubles plaguing the big three automakers.

Ford’s buyout package is being offered to workers who have been on the job at least a year. It includes $50,000 cash plus another $20,000 in cash or a voucher for a new vehicle in addition to six months of paid basic health care coverage. Workers who are eligible for retirement can also take the buyout offer but they have to wait up to 18 months before retiring.

In order to take advantage of the retirement package, employees must be 55 or older with ten years of work, 65 with one year of work or have 30 years with the company. This package offers $40,000 cash for skilled jobs and $20,000 for non-skilled jobs.

In the beginning of 2009, Ford had 89,000 workers in North America. As of the end of September 2009, that number had been reduced to 80,200 through buyouts, layoffs and attrition.

Ford suffered a 19% drop in sales through November 2009 compared to November of last year. The U.S. auto market as a whole is down a total of 24% for the year, and Chrysler and GM have each experienced declines in sales of more than 30%.

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