Ford Motor Co. this week begins the third and final phase of salaried workers buyouts, as it seeks to trim some 10,000 positions from its U.S. workforce.
The move comes after the company announced last month some 38,000 hourly workers had accepted buyout packages, a key element of Ford’s North American Way Forward restructuring strategy.
The auto maker earlier this year said it hoped to have all salaried workforce reductions completed by 2008. If it doesn’t meet its targeted quota, involuntary layoffs could be used to reach that goal.
Ford first began offering salaried buyout packages in early October. A second buyout period, from Oct. 16-30, was for management level and above, a spokeswoman tells Ward’s.
“That’s closed (now), and a high percentage of employees who opted to take that program will be leaving by end of calendar year,” she says, declining to provide an overall headcount of those leaving.
During the first two rounds of offerings, salaried workers were given their choice of three buyout programs. For the final phase, the auto maker is offering only two packages, she says.
The first will be a general salaried separation program, primarily aimed at younger employees not eligible for retirement. That program includes a lump-sum severance payment of up to 13 months of pay, which is determined by length of service.
The second package is an early retirement program for employees 50 years of age or older with at least 10 years of service. Those accepting the second package will receive basic retirement benefits, the spokeswoman says, including pension and health-care benefits and a vehicle-purchase plan.
Those that accept the second package are guaranteed to receive their benefits, unlike the general salaried separation program, which does not offer a guarantee.
“The only reason (the general salaried program wouldn’t provide benefits) is if the company over-subscribed for people who sign up for it,” the spokeswoman says. “That would be the only situation.”
The salaried packages reportedly are not as generous as those offered to hourly personnel, whose buyouts included large cash payments and tuition reimbursement for those seeking a new career.
No tuition assistance will be offered to departing salaried workers, the spokeswoman says.
Salaried workers will be offered one of the two packages on a case-by-case basis, with managers of each department choosing which employees should receive an offer.
The final phase of salaried buyout packages ends Jan. 5.
