Join Date: Feb 2001
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US:How 38,000 were enticed to leave Ford
How 38,000 were enticed to leave Ford
Automaker relied on motivational speakers, marketing techniques to sell workers on buyouts.
Bryce G. Hoffman / The Detroit News
DEARBORN -- Two weeks ago, Brian Chupa and his co-workers at Ford Motor Co.'s Sterling Heights plant listened as a company executive outlined the grim reality facing the automaker and the factory.
It was but the final piece of a remarkable effort by Ford aimed at one unusual goal: convincing as many of its workers as possible to leave.
The rank and file at Sterling Heights had already heard a rousing pep talk by motivational speaker Willie Jolley titled "A Setback Is a Setup for a Comeback." They attended career fairs and met with potential employers from Union Pacific Railroad to the CIA. They were given a DVD that included an ominous review of Ford's condition and upbeat profiles of workers who took buyouts and found success in other fields.
But Chupa was still undecided until the man at the podium started talking about coming budget cuts and layoffs at his factory. "When I heard that, I was pretty much done," Chupa said.
He started doing the math.
With eight years at Ford, Chupa was near the bottom of the seniority list, meaning high on the layoff list. Then there was Ford's offer: a $100,000 lump sum payment -- $68,000 after taxes, but still enough to pay off his debt and take the wife on a nice vacation.
So, like 38,000 other Ford hourly employees, Chupa signed up for a buyout.
The untold story of how Ford convinced nearly half of its U.S. factory work force to head for the exits -- the largest employee exodus in automotive history -- is an amazing mix of sociology, psychology and mass marketing.
In the go-go late 1990s, Ford went to similar lengths to recruit new talent. Now, its survival hinges on cutting its work force to match dramatically reduced demand for its cars and trucks.
Meeting in Vegas
The effort began in March when Ford executives met with UAW leaders at Bally's in Las Vegas. As bets were seen and raised in the casino downstairs, Ford put its own cards on the table.
"We had a very frank and direct discussion of where things were going with Ford and the need for all of our manufacturing facilities to truly be competitive," recalled Joe Hinrichs, Ford vice president of manufacturing in North America.
He and Marty Mulloy, Ford's head of labor affairs, told union officials the automaker was facing the most serious crisis in its 103-year history. It had too many factories and too many workers. Dramatic cuts were needed. "How do we do it together?" they asked.
Ford already was offering buyouts to workers at former Visteon Corp. factories it had taken back in 2005 as part of the deal with its former parts subsidiary and the UAW. The union agreed to extend those buyouts to Ford plants marked for idling as part of its restructuring. Negotiations began on extending them to other facilities.
The talks took on new urgency after General Motors Corp. offered buyouts to all of its U.S. hourly workers and thousands rushed to sign up.
In Dearborn, Ford executives debated whether to follow suit. Initially, the company decided to hold to a more focused approach. But pressure from Wall Street was building as Ford's outlook darkened. Ford met with the UAW in August, and both sides agreed the time had come to throw open the exit doors.
A message to workers
UAW Vice President Bob King summed up the union's position in a message included on the DVD Ford distributed to rank-and-file workers. "Ford is in deep financial trouble -- so serious, I believe, that it has put the hard-earned job security of many of our members at serious risk," he said. "In this immediate crisis, a voluntary work force reduction seems to be our best option."
Early on, the number of workers signing up for buyouts was lower than expected.
Ford decided to inject some science into the process and asked researchers at the University of Michigan-Dearborn to help.
Kim Schatzel, associate professor of marketing, and her team began by surveying more than 2,000 workers from Ford's shuttered factories in Edison, N.J., and St. Louis, Mo., asking why some workers took buyouts and others did not.
"We found their opinions about their own ability to find future employment greatly affected their decision," Schatzel said.
That prompted Ford to offer career fairs at each of its factories.
Schatzel also discovered that many workers were reluctant to commit to a four-year degree program. Some were intimidated by the time commitment; others already had associate's degrees. So, Ford decided to offer a two-year education package with a richer stipend to go along with a four-year education package.
And because the researchers discovered that workers who met with a financial adviser were more likely to take a buyout, Ford decided to make them available to all skilled-trades employees. The number of skilled-trades workers signing up soared.
A new slogan
To market the buyout program, Ford assembled a team drawn from human resources, manufacturing, labor relations and public relations.
Their motto, "You can achieve your dreams," was soon emblazoned on banners hanging from the rafters of every Ford factory; on posters pinned on bulletin boards; and on pamphlets and DVDs distributed to every worker.
In addition to the presentations by King and Mulloy and details of the eight buyout packages, the DVDs included video profiles of seven former Ford workers who had taken buyouts and found greener pastures.
A martial arts instructor talked about following his dreams while performing karate chops on a rubber dummy.
An aging rocker, after breaking into a mean guitar riff, encouraged workers to turn their hobbies into a job like he did when he opened a guitar store.
Finally, a former electrician was shown traversing Harvard Square in the de rigueur polo sweater of an Ivy Leaguer. "I'm now at Harvard studying business," he tells his former union brethren. "I'm proving you can start over."
The Ford team developed a Web site to help workers and enlisted human resources retirees to staff a call center. At one point, it was averaging 200 calls a day.
The FBI is calling
Career fairs were organized at each plant with the help of local colleges, universities and chambers of commerce. Booths of the Border Patrol, FBI and CIA were big draws.
Ford executives like Hinrichs and Mulloy barnstormed plants around the country with UAW officials. Production was halted at factories to allow workers to attend these sobering presentations.
The effort paid off. Ford surpassed its goal of cutting 30,000 factory jobs by 2008. And Ford workers proved wrong the critics who said they would just as soon sit in the jobs banks and get paid for doing nothing.
"People want to work," Mulloy said. "What we did was develop programs to let them pursue their interests."
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.....