Ford paying workers to go away


Richard Moore

February 26, 2008

Ford Is Pushing Buyouts to Workers

WOODHAVEN, Mich. ‹ The Ford Motor Company is applying the hard sell these days ‹
piling on incentives, doling out marketing DVDs and brochures, and making offers
it hopes are too good to pass up.

But Ford¹s big new push is not to sell cars. Instead, it is trying to sign up 
thousands of workers to take buyouts, partly by convincing them that their 
brightest future lies outside the company that long offered middle-class wages 
for blue-collar jobs.

So, Ford is pitching a buffet of buyout packages that are easily among the 
richest ever offered to factory workers, including one-time cash payments of 
$140,000 or college tuition plans for an entire family.

The automaker is also putting on job fairs in its plants and mailing each of its
54,000 hourly workers a feature-length DVD, titled ³Connecting With Your 
Future,² that extols the promise of new careers beyond the assembly line.

Last Friday, inside a huge sheet-metal stamping plant in this industrial center 
south of Detroit, Ford workers spent their lunch hour perusing opportunities to 
go back to school, hire on at growing companies and open fast-food franchises.

³I am taking it seriously, but it¹s really hard to think about leaving,² said 
Jerry Thomas, a 37-year-old millwright with 12 years at Ford. ³The only thing 
that would make me do it is the uncertainty. We just don¹t know what¹s going to 
happen with Ford.²

The push to move workers out reflects the tough times in Detroit. Ford has lost 
$15 billion in the last two years, and General Motors and Chrysler are also 
revamping after heavy losses.

While Detroit¹s Big Three have already cut about 80,000 jobs through buyouts and
early retirements since 2006, a new blitz is under way to shrink employment even
further to make way for lower-paid workers in the future.

The aggressive approach to buyouts is particularly striking at Ford.

In the early 1900s, the company founder, Henry Ford, transformed the American 
workplace by pioneering $5-a-day wages on the assembly line. And the company¹s 
paternalistic culture still lingers in the way workers often refer to the 
company as ³Ford¹s,² in reference to the family that provided them a comfortable

Ford executives say the buyout packages, which are the most lucrative and 
diverse ever offered in the industry, reflect a belief that Ford should look 
after its workers and ease their transition into different careers.

³We need to restructure, and it¹s important to our business to do so,² said 
Joseph R. Hinrichs, Ford¹s head of global manufacturing. ³But we want to do it 
in the best way for our employees.²

But there is no mistaking Ford¹s message that this is the last companywide 
offer, and there could be layoffs if further downsizing becomes necessary.

Ford is not saying how many workers it expects to take the buyouts by a March 18
deadline. But Wall Street analysts say the company has set a goal to get 8,000 
employees to sign up.

General Motors is also extending buyout offers to all of its 74,000 hourly 
employees, while Chrysler is offering buyouts to workers on a regional and 
individual plant basis.

The belt-tightening comes after years of declining market share and increased 
competition from foreign automakers, led by Toyota.

³These companies are trying to do in the last 24 months what they should have 
done over the last 24 years,² said John A. Casesa of the automotive consulting 
firm Casesa Shapiro Group. ³That¹s why it¹s such a shock to the system.²

Ford has eliminated more than 32,000 jobs over the last two years through 
buyouts and early retirements. But it needs to cut more to improve productivity,
make room for transfers from its former Visteon parts plants, and pave the way 
for new hires at wages of $14 an hour ‹ roughly half of current pay scales.

³We always prefer for people to voluntarily leave and that¹s why we put the 
energy and effort into this package of buyouts,² said Martin J. Mulloy, Ford¹s 
vice president for labor affairs.

The buyout deals were developed with the United Automobile Workers union. In 
fact, one senior union official endorsed the downsizing effort in a cover 
article titled ³Fresh Opportunities² in the company¹s internal Ford World 

³Because of the loss of market share and because the economy is so bad, there 
aren¹t enough jobs for everybody,² said the official, Bob King, the U.A.W.¹s 
Ford division vice president.

The company is offering a broad range of buyout and early retirement packages.

Employees with as little as one year of seniority can receive $100,000 cash, 
although they give up all health benefits after a six-month period. For 
employees at least 55 years old and with at least 10 years on the job, the 
payout jumps to $140,000.

Ford, which has a younger work force than G.M., also included many educational 
options. One buyout offer provides a worker four years of tuition reimbursement 
up to $15,000 annually, plus health care coverage over that period and a stipend
equal to 50 percent of base wages.

At the Woodhaven stamping plant, the 1,142 hourly workers are wrestling with the
many choices facing them.

³They want to give people incentive to walk away,² said Jim Irey, who has worked
in the plant for 40 years. ³It¹s the reality of the business, whether you like 
it or not.²

Another worker, Andy Linko, contrasted the buyout deals to how he fared when his
previous job as a steel worker disappeared.

³We never had this type of opportunity when I was in the steel industry,² Mr. 
Linko said. ³We knew for years that the industry was in trouble, and one day the
doors just shut.²

The job fair at Woodhaven offered a mix of career prospects, from truck driving 
to electrician work at the local utility to franchise opportunities at the 
Little Caesars pizza chain.

One recruiter, Heidi Daniels of DTE Energy, said the plant was a ³great 
opportunity² to find skilled labor. ³I¹ve heard of offering out-placement 
assistance, but this is unique,² Ms. Daniels said. ³It¹s almost unheard-of.²

Ford has also gone to great lengths to promote the promise of life after the 
auto industry.

In its DVD, Ford employs actors to urge workers to take ³the opportunity to step
out and try something new.² Various segments of the DVD highlight former Ford 
workers who have started their own businesses after taking buyouts.

The company does not track the fortunes of all its former employees, but said it
was proud of the ³success stories² of people who have taken buyouts.

One such worker, Dale Beck, took a $100,000 buyout in 2006 to open a Little 
Caesars outlet in St. Louis.

³I went from making cars to making pizzas, and it¹s turned out pretty well for 
me,² Mr. Beck said. ³I also know some people who took the money and spent it, 
and now they¹re struggling.²

Workers in the Woodhaven plant seem to split among younger workers who see the 
buyouts as a window to a new life, and older employees who cannot imagine giving
up their Ford paychecks.

³I¹m taking the $100,000,² said Stacy Haynes, a 34-year-old mother of four 
children. ³I¹ve been here 12 years, and I can¹t believe I lasted this long.²

Bill Fender, a 58-year-old tool and die maker with 37 years on the job, sees it 

³I¹d like to retire, but it¹s just not enough money for me now,² Mr. Fender 
said. ³I¹m making almost $80,000 a year, and I can¹t see leaving that behind.²

One thing Ford workers are proud of is that their buyout options are more 
extensive and, in some instances, better paying than those at G.M.

Those bragging rights seem a poignant commentary on the depth of Detroit¹s 
difficulties, said the historian Douglas Brinkley, author of a book on Ford 
titled ³Wheels for the World.²

³There was a time in the 20th century when you flashed a Ford badge in Detroit 
and it meant you were a man on the rise,² Mr. Brinkley said. ³Now, the new 
status symbol of the Rust Belt is they are downsizing people better than other 
companies are.²

Copyright 2008 The New York Times Company

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