TBO.com - TBO is Tampa Bay Online

Ford Offers Buyouts To Slash Payroll

ADVERTISEMENT

By DEE-ANN DURBIN and TOM KRISHER, The Associated Press

Published: January 25, 2008

DEARBORN, Mich. - Ford Motor Co. will offer buyout and early retirement packages to 54,000 U.S. hourly workers, or 93 percent of its hourly work force, in an effort to cut costs and replace those leaving with lower-paid workers. Thursday's announcement came as Ford said it narrowed its losses in 2007 but warned that the outlook for U.S. sales in 2008 remains grim.

Ford President and CEO Alan Mulally said the automaker also will trim salaried staff, mostly through attrition but possibly through layoffs, as it tries to adjust to a slumping U.S. market. Ford said its U.S. market share will be at the low end of a 14 to 15 percent range in 2008, down from 14.8 percent in 2007 and 26 percent a decade ago. Ford fell behind Toyota Motor Corp. in U.S. sales last year, ceding its 75-year position as the nation's No. 2 auto seller behind General Motors Corp.

"We are going to match our production capacity to the real fundamental demand," Mulally said during a conference call with analysts and media.

Ford lost $2.8 billion, or $1.30 per share, in the fourth quarter, narrower than a loss of $5.6 billion, or $2.98 per share, in 2006. The full-year loss of $2.7 billion, or $1.35 per share, was significantly better than 2006, when Ford lost $12.6 billion, or $6.72 per share.

Mulally said Ford remains on track to make a profit in 2009, but is expecting another loss in 2008.

"Overall, our plan is working and we continue to show progress," Mulally said.

Mulally said the United Auto Workers agreed to two rounds of buyouts for hourly workers. The first will be offered immediately to the fewer than 1,000 remaining workers who were employed at already closed plants in Atlanta, St. Louis, Edison, N.J., and Norfolk, Va.

The second round of buyouts would go to union workers at all other U.S. Ford locations.

About 3,900 hourly workers aren't covered by the UAW contract and won't be offered the deals.

Under the contract Ford and the UAW, signed in November, Ford can pay new workers $14.20 per hour, or about half the wages of a current worker. Under the contract, up to 20 percent of Ford's U.S. hourly work force may be paid at the lower wages.

Ford shares fell 4 cents to $6.26 Thursday.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT