• Dec 21, 2009
According to Ford spokesman Mark Truby, "Despite a strengthening in our business, we still have a surplus in employees." Union employees to be specific. As such, Ford has just announced plans to reduce its unionized workforce by offering a buyout package to all 41,000 UAW members currently employed by the automaker.

Reuters reports that Ford workers with at least one year of experience can take a payout of $50,000 plus a new car voucher worth $25,000 or an additional cash payment of $20,000. Retirement-age workers can opt to take their pensions plus the $25,000 new vehicle voucher or the $20,000 payment. Finally, skilled-trade workers that are eligible for retirement can opt for a $40,000 payout plus their pensions.

Ford says these efforts are necessary to remain competitive with foreign rivals and fellow American automakers General Motors and Chrysler, both of which recently went through government-sponsored bankruptcy proceedings and extensive reorganization. Earlier this year, Ford's UAW workers voted down a revised contract that would have essentially granted Ford the same measures that unionized auto workers had earlier extended to Chrysler and General Motors.

Workers who accept the buyout packages would leave sometime during the month of February, 2010. Any new workers hired as replacements will start at $14 per hour under the latest UAW contract, which is half of the current average wage of UAW employees being offered the buyouts.

[Source: Reuters | Image: Bill Pugliano/Getty]


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  • 70 Comments
      Charlie
      • 5 Years Ago
      Sounds like Ford is tired of the UAW, good.
      • 5 Years Ago
      @ polo and all the other union devotees - just for the record I fully agree there has been a great deal of short-sighted actions by the management of the vehicle manufacturers in there attempt to make profit. But some of that can be explained away by the fact that the USA is a bit of a glutton when it comes to having your cake and eating it too. This country is a wonderful paradise in many ways where people are pretty much free to do whatever they please. The resources are incredible. The cost of fuel and the expansive highways to travel freely is an open temptation to build bigger and more powerful cars and trucks. It's what people wanted and when fuel was cheap (it still is relatively cheap) the car companies were not forced to change the equation. They built vehicles that could sell and make money.

      But another part of that equation was they had to make money quickly in order to keep up with expenses they were incurring from a growing union workforce and legacy pension plans. (Now please don't get into thinking this was the only issue but it has been one large one.) So it's really been a case of putting the cart before the horse and now we are at a point where reality has set in.

      It's good to see unions make concessions. But at the same token it's better if the concessions are brought to a point where the company can remain viable and the workers become owners. Trust me, if electric vehicles take off car companies and their workers are going to have huge issues to deal with in figuring out sustainable revenue streams because once an EV leaves the lot it rarely will need to return for servicing and maintenance will be minimal. Reality is both the unions and the manufacturers need to get their house in order sooner rather than later.
      • 5 Years Ago
      UAW belongs in the history books.
      • 5 Years Ago
      people who have never worked in manufacturing need to stop talking about stuff they nothing about.NOT all union workers in this country make the kind of money the uaw used to make.I worked for a luggage co.in denver ,colorado for 41 yrs and I was a lead operator.When they closed and moved production out of the country and moved distribution to jacksonville ,Fl.I was only making 14.70 an hour,and my pension for 41yrs less than $1000 per month,-$500 amonth for Insurance.So don't go blaming unions for all the nations ills,when its really the greed of these huge companies.
      Oh yeh, it was a steel workers union,believe me not all locals make big money!
        • 5 Years Ago
        I admit I was focusing on the UAW specifically, although I am including a lot of the larger, more powerful unions in that category.

        I personally worked in the automotive industry, in plants run by the UAW and plants without it. I believe I can justify my experiences there.


        Manufacturing IS what made this country great, and I am genuinely sad to see it all leave the country. I understand corporation's desires to save costs, as much as I understand individuals wanting higher wages. What needs to happen, and countries such as Japan and China, have taxes and laws that make imports unfavorable. We need to do the same, and provide incentives for companies to produce locally. This could mean higher import taxes, or penalties for companies that outsource jobs to other countries, or tax benefits if they bring production back, etc... there are a million options. THAT, and we need to get workers' support, and their commitment to the companies' health.
      Steve
      • 5 Years Ago
      So with the buyout and new workers being paid at 1/2 the cost of what the present workers are making, Does this mean that the cost of FORD produced vehicles will be reduced to an affordable ammount. I mean, am I wrong to say that the $50,000 price tag on a Super Duty Pickup is reasonable to pay for its workers who put it together correct? So if it cost them 1/2 to make it now, shouldnt that vehicle cost 1/2 of what it does today? Just thinking logic here or am I crazy?
        • 5 Years Ago
        @Steve
        Well, the price point of a vehicle is not just based on the labor cost to produce it. It's a large part of it, but by no means all. There are raw materials, supplier parts, engineers, management, R&D costs, marketing costs, designers, pensions :-), etc.. to pay in addition to labor.

        A reduction in part of the labor cost (remember, not 100% of the members will be paid 1/2 the wage) will only lead to one of two things, or a combination thereof: slightly lower price point, or higher profit margin for Ford. It will certainly not warrant a 50% MSRP reduction!
      • 5 Years Ago
      Whats wrong when a company can't just fire people it doesn't need anymore?? That they need to be bought out like if it was some kind of marriage...Gotta love the Unions.....
      • 5 Years Ago
      Best if Ford could buy out ALL of its UAW employees and replace them with non-union workers who understand that they work for their employer, not their union.

      A 100% non-union work force would make Ford labor-competitive with Toyota, Honda, etc., and would finally do away with one of the major causes of the near demise of the U.S. auto industry.

      Unions are parasites that ultimately kill their hosts!
        • 5 Years Ago
        The problem is, and I'm generalizing and using stereotypes, but a lot of the hourly workers do not understand the financial workings of a large corporation, and even when shown figures showing the dire state of the company, do not have the reaction to "do something about it"

        Getting rid of the unions would be the best thing for those companies, however I don't see it happening anytime soon. The unions would rather let the companies die (well, 2 of them) than give in...

        From their point of view, they need to continuously do something for the workers (ie get them higher wages) to justify their existence... and in the process, the greedy ******* running the unions want more and more profits for themselves... hence, they're not going anywhere until the govt. makes a ban on unions, or splits up the UAW into smaller, less powerful unions.
      • 5 Years Ago
      28per hr?
      damn...
      • 5 Years Ago
      Haha...the keyword in the headline is "offering". Who thinks low skilled production workers will take the buyout and find another job with the same compensation in the current economy? Get rid of the UAW? Thats a no go with Obama.
      • 5 Years Ago
      So why not just pay the uaw works to take a pay cut??? Its not like they are going to find something else making the same amount. That way they dont have to train new people and people dont lose there jobs!!!
        • 5 Years Ago
        Exactly the problem with the unions. Where I worked (now being shut down), the plant was closed because it was not profitable. Had the union members opted to take a pay cut, perhaps we'd be singing a different song right now and they'd still all have their jobs!

        I believe the reason the unions don't like to go that route is because IF the leaders agree to a paycut, then the membership will start questioning its reason for existence, which then in turn could lead to a) the leaders not being reelected or b) the union being disbanded. They still fail to see past their horizon that both will happen if concessions are not made, but I do believe that is the reasoning (or part of it).
      • 5 Years Ago
      I am suprised states such as MI, Ohio still allow UAW to operate there considering how much damage it has done to them. Unless people rise up against UAW future looks pretty bleak for Michigan.
      • 5 Years Ago
      So basically Ford is trying to kill off the UAW more or less.
      Interesting...
        • 5 Years Ago
        Don't forget that the UAW is a direct competitor now that they own a reasonable chunk of GM and Chrysler.

        Still, this move won't rid Ford of the UAW. Only of the pay discrepancy. Any new hires will still be forced to adhere to the union wage rules. It's just that those rules now allow for lower salaries.

        This is a very good move on the part of Ford IMO, especially since Ford's UAW workers failed to grant further concessions to bring them on par with GM.
        • 5 Years Ago
        I agree. This is a positive step for Ford. GM and Chrysler had most/all of their debts wiped out in their bankruptcies and got sweetheart deals from the UAW. Ford still has a lot of debt and didn't get any concessions from the UAW.

        Basically, the UAW punished Ford for not having to file bankruptcy, stating that their current market position didn't warrant UAW concessions. Personally, I think the UAW should have to cut the same deal to all U.S. manufacturers.
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