Re: US:Ford's salaried ponder buyouts
Buyout offers swirl at Ford
10,000 additional salaried jobs need to be cut
BY SARAH A. WEBSTER
DETROIT FREE PRESS BUSINESS WRITER
Details on the buyout packages
Ford Motor Co. is offering two buyout packages in its latest round of offers to salaried workers. The last day for informing employees is Jan. 5, and workers have a 45-day window to accept or reject a package after it is offered.
That means Feb. 19 will be the final day for accepting a package for workers offered a deal on the last day of the program.
The packages now under consideration include:
• Voluntary Salaried Separation Program: Employees must have at least one year of continuous service. Severance pay is provided for up to 13 months, depending on length of service. Some employees say their years of service put them into a category that qualifies them for three, six or nine or more months of pay. • Salaried Retirement Window: This program is aimed at lower-ranking managers and general salaried employees, ages 50 to 64, with 10 years of service, or workers who are least 65 and have one year of service.
Workers who accept one of the above programs are to leave Ford by Feb. 28. Those workers who do not sign up for a buyout voluntarily and are later dismissed involuntarily will get up to one year's salary, based on years of service.
Monday was another in a series of Black Mondays this year for workers at Ford Motor Co.
The money-losing automaker kicked off its biggest wave of buyout offers yet for the white-collar workforce of nearly 40,000.
"I wore all black today," said a single, thirtysomething engineer who was offered a buyout early Monday.
The day was filled, he said, with "the same black humor we've had for the last few years" and a succession of private, scripted meetings between supervisors and their subordinates, which workers have anxiously anticipated for many weeks.
Some workers apparently found out in advance on a company intranet site.
The meetings with lower-level managers and general salaried employees will continue through the holidays, until Jan. 5. The workers likely will spend the coming weeks agonizing about whether to take the offers, knowing they could face layoffs -- and smaller severance packages -- if not enough workers leave voluntarily.
Already this year, Ford workers faced the Jan. 23 introduction of the Way Forward turnaround plan, an outline for slashing the number of plants and employees in North America. On two Mondays in October, Ford launched a variety of voluntary buyout programs in an effort to cut 30,000 hourly and 14,000 salaried workers.
By Monday, the young engineer said he already had a lot of time to think about his options, but he still wasn't sure whether he would take a deal. His biggest fear, he said, was selling his Oakland County home of 10 years in a market flush with the slow-selling, heavily-discounted houses of displaced auto industry workers.
"For me, a lot comes down to the house," said the engineer, who, like other workers interviewed Monday, declined to be named because of their lack of job security. "I'll have to start looking at options that involve losing my shirt."
The drawn-out series of buyout offers and 45-day acceptance windows for salaried workers won't officially conclude until Feb. 19.
After that, Ford likely will know whether involuntary separations -- considered permanent layoffs by workers -- will be necessary.
Ford aims for a cumulative reduction of 14,000 salaried workers in its Way Forward restructuring plan, and 4,000 already left the company this year. That means another 10,000 must go.
Ford spokeswoman Marcey Evans said it is far too soon to know whether the company is on pace to reach its reduction target. Salaried workers who accepted buyouts during the first wave aren't expected to leave the company until Dec. 31, she noted.
But it is clear that Ford must cut its costs quickly.
The automaker posted a $7-billion loss through September, and a Free Press analysis shows the automaker likely will lose $9.8 billion to $10.5 billion this year. What's more, the company expects to burn through $17 billion in cash through 2009.
The company has mortgaged nearly all of its assets -- including its factories and the trademark for the Blue Oval -- for a historic bailout deal totaling $25.45 billion. That should help carry the company until 2009, when it is projecting a small profit.
But Ford officials and experts who study the company have said the automaker must shrink fast to meet that profit target.
The long process of salaried separations -- and the size of the buyout packages -- stands in contrast to the six-week window hourly workers had to decide their fate. That window opened Oct. 16 and closed Nov. 27, and included eight incentive packages, such as $100,000 lump-sum payouts or tuition reimbursement.
Ford's hourly buyout program met or exceeded many expectations, with about 32,000 Ford employees and 6,000 Ford workers at a company subsidiary, Automotive Components Holdings LLC, accepting a deal.
Salaried workers offered buyouts Monday described their experiences with management and inside the company to the Free Press.
The young engineer who worries about selling his house was one of several employees who said he learned he would be offered a buyout in advance of the meeting, by accessing the information on a company intranet site not yet officially in operation.
"It was operational enough that you could find out," he said, noting that most employees quickly figured out how to access the site. One 12-year employee, a mid-level manager who was offered a buyout Monday, said he found out about his fate in advance, too.
"There have been lots of funny little leaks like that," he said.
The engineer said management took extra care during his meeting to describe the variety of ages of employees being offered buyouts in his area, an apparent effort to show that the offers were fair.
Although workers knew another Black Monday was coming, the event was still difficult.
"I think more people are being affected than they thought," the mid-level manager said. "A woman I sit near got an offer and her husband didn't. They were both hoping to get one and leave the state. Now they don't know what to do.
"There are a number of heads down and people heading out of the building quietly."
One worker with nearly 20 years of experience said he wasn't sure if he would take a buyout. If he takes the deal, he said he would get a salary for 12 months. But if Ford must fire workers in his department to make its goal, he would only get nine months' salary. Then, he would face the challenge of finding a job, possibly uprooting his family and trying to sell his house. He said he is balancing that challenge against Ford's uncertain future.
"It's dire and getting worse," he said.
Several of the employees said they wished they were offered the same generous deal secured by UAW leaders for union members.
The difference in deals "got a guy or two around here upset," the young engineer said.
If he had the opportunity for the UAW package, he added, "I'd be gone tomorrow."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....