Wednesday, November 29, 2006

35,000 Ford workers to take buyout.

Bidness: Via the Detroit News.

Ford expects 35,000 to 36,000 of its hourly workers to leave the company. The number of workers who signed up is higher but the company expects a certain number to change their mind. Ford has approximately 75,000 hourly workers represented by the United Auto Workers. The company offered those workers a choice of eight buyout packages in an effort to cut its payroll costs and better align production capacity with market demand. Those packages ranged from a $35,000 early retirement offer that allowed workers to leave with full pension and retirement benefits to a $140,000 lump sum payment for workers who agreed to walk away and give up all benefits except for pension already accrued. Another program paid workers' college tuition for up to four years while giving them half their pay and health insurance. The take rate for that package was quite high, sources said. That is more good news for the company because, as with the lump sum payment, Ford will no longer be responsible for those workers' retirement benefits beyond any pension they have already earned. Ford announced an $18 billion financing deal Monday that will help cover the cost of the buyouts.

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