Ford's Health-Care Costs Need a Doctor

Ford Motor Co. is wrestling with a “proposal” that would see its health care costs increase 20% next year, WAW has learned. Ford confirms it is “in negotiations” with Blue Cross and Blue Shield, the document's author and the administrator of Ford's primary employee health-care plan, but won't reveal its implications or disclose how much is spent on employee health care. An insider tells WAW that such a hike would have a pricetag of about $400 million. It's another headache, on top of sales that fell 7.5% in August compared to year-ago and 10.8% year-to-date vs. like-2000. Ford also is distracted by more recalls, confirmation the National Highway Traffic Safety Admin. is examining stabilizer bar links on the '97 and '98 Ford Expedition and the revelation that cash reserves have declined to $4.1 billion from $14.7 billion and speculation they could fall below $1 billion by December after significant one-time charges such as last spring's $3 billion Firestone tire recall. Meanwhile, fears of layoffs follow the announced integration of Ford's North American car and truck engineering. Effective Oct. 1, North America car vice president Chris Theodore became vice president-North America product development, reporting to North America Group Vice President Nick Scheele and Richard Parry-Jones, global product development group vice president and chief technical officer. Meanwhile, Gurminder Bedi, vice president-truck development, announces his resignation after 30 years, and Ford offers generous buyout offers to white-collar employees — including senior managers — in a bid to entice as many as 5,000 workers into leaving the company. The offers include beefed-up pensions, a year's vacation pay and up to $25,000 toward the purchase of a new car or truck. Cost of the program is estimated at $1.1 billion.