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38,000 Ford workers opt for buyouts, beating goal
In St. Paul, 93 percent of the Ranger plant's union employees elected to leave the company.
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About 38,000 Ford Motor Co. workers nationwide elected to accept buyout offers, the ailing automaker said Wednesday.
In St. Paul, union officials made a revised estimate that 1,600 of their 1,725 members decided to take one of the buyout packages. That 93 percent acceptance rate more than doubled the companywide rate of 46 percent. The union said Monday the number was expected to be as many as 1,400 in St. Paul.
"We are definitely pleased with the acceptance rates," Ford spokeswoman Marcey Evans said. "We think one of the reasons that we got such a good acceptance rate was the nature of the packages that we created in collaboration with the UAW."
Hourly employees who accepted buyout packages during the six-week enrollment period that began Oct. 16 and ended Monday will begin to leave the company in January, Ford officials said in a prepared statement. The employee departures from North American plants are expected to continue through the year and be completed by Sept. 1.
Ford officials stressed that the 38,000 figure was "preliminary," but it's clear that whatever the final number turns out to be, more workers have elected to leave Ford than the 30,000 to 35,000 the company projected when it announced early this year that it would engage in a comprehensive restructuring.
Ford has said it intends to close 16 North American plants by the end of 2008, instead of its original 2012 target, because of rapidly shrinking U.S. market share.
The company now has 17 percent of the market, compared with the mid-20s just a few years ago.
Of the 38,000 workers leaving, 30,000 signed up during the past six weeks. About 8,000 had signed up under offers made earlier this year, officials said.
Ford had 83,000 UAW workers at the start of 2006.
The number of people taking buyouts companywide surprised Roger Terveen, president of the UAW Local 879 in St. Paul.
"I was dumbfounded, to be frank," Terveen said. "I knew that the number would be high, but I didn't know if they would hit the 35,000 [target]. Going over it by 3,000, it was like, 'Wow!' "
In St. Paul, where about 1,600 union workers applied for one of the eight buyout options offered, Terveen and Ford employees said the decision was difficult for many. Now that the decision has been made, workers are still sad, but "glad that it's over," Terveen said.
The average age at the plant is 40, meaning that many workers are still decades away from retirement, and confronted with the decision of whether to try to start new careers.
The St. Paul plant will close by June 2008; beginning in January, it will go from two shifts to one. Workers there have already become accustomed to regular furloughs because of declining demand for the Ranger pickup. Union workers returned to work Nov. 20 after a three-week furlough. Ford is expected to bring on some temporary workers to help keep the plant operating until it closes, as its permanent workers begin leaving the company in the coming months.
Ford's buyout offers ranged from $35,000 to $140,000, depending on a worker's age, length of service and the type of retirement or separation package selected. Two tuition packages (for two or four years of study) offer $15,000 a year for school costs plus medical benefits and half the worker's base wages.
Ford officials said Wednesday that all buyout acceptances are preliminary, with employees able to rescind them "up until the time of their separation from the company."While I know that in many cases decisions to leave the company were difficult for our employees, the acceptances received through this voluntary effort will help Ford to become more competitive," Ford CEO and President Alan Mulally said in a prepared statement.
The automaker lost $7 billion during the first nine months of 2006. Ford said Wednesday it expects to burn through $17 billion more through 2009 because of continuing losses in its manufacturing operations.
Dee DePass • 612-673-7725 • ddepass@startribune.com
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