January 25, 2008

Ford’s Buyouts: PC Wins, Workers Lose, Media Dozes

For personal and professional reasons, it gives me absolutely no pleasure to say that I saw this coming, and that it came sooner than I thought it would.

Here’s the news, assembled from wire reports by the Cincinnati Enquirer, in an article that should be entitled “Ford to Workers: Go Away” (bolds are mine throughout) —

Ford Motor Co. will offer buyout and early retirement packages to 54,000 U.S. hourly workers, or 93 percent of its hourly work force, in an effort to cut costs and replace those leaving with lower-paid workers. Thursday’s announcement came as Ford said it narrowed its losses in 2007 but warned that the outlook for U.S. sales in 2008 remains grim.

Ford wouldn’t say how many people it hopes will take the offer, but Chief Financial Officer Don Leclair said Ford has about 12,000 U.S. workers eligible for retirement, about 22 percent of its hourly work force.

Ford is offering eight different packages for employees, including a $50,000 lump-sum payment for non-skilled workers and a $70,000 lump-sum payment for skilled workers. That is sweeter than 2006, when non-skilled workers were offered $35,000.

….. The buyouts come in addition to a 2006 round of buyouts in which 33,600 U.S. hourly workers left the company. This time around, they could be replaced with lower-wage workers. Under Ford’s new contract with the UAW, which was signed in November, Ford can pay new workers $14.20 per hour, or about half the wages of a current worker. Under the contract, up to 20 percent of Ford’s U.S. hourly work force may be paid at the lower wages.

A Chicago Tribune report claims that buyout offers are being made to all hourly employees.

A Dow Jones Newswire report isolates the problem:

North American Losses Continue

Ford, since early 2006, has been trimming jobs and closing plants to match changing market demands, especially in North America where it reported a pre-tax loss of $1.6 billion for the fourth quarter, versus $2.7 billion a year earlier. The auto maker was profitable in all of its other regions.

It’s going to take more work than I have time for now to get hard numbers together, but you can’t help but think that the 778,000-plus who have signed the American Family Association’s boycott pledge over the company’s support of homosexual-activist publications and causes, along with AFA’s 3.35 million members, 40-plus other boycott-supporting organizations, and likely 3-5 word-of-mouth sympathizers for every AFA member, have collectively been a factor contributing to Ford-North America’s dire circumstances.

Yet Old Media continues to pretend that the boycott doesn’t exist, even as Ford’s sales have fallen far more than the other two Detroit-based carmakers during the almost two years of AFA’s boycott. Ford’s media pals have enabled the company to kid itself about the scope of the AFA problem, and to risk corporate suicide in the name of political correctness. For Ford hourly and salaried employees, a difficult day of reckoning has arrived.

Too bad the people who caused it aren’t the ones paying the price. Normally, a situation such as this, which I believe is unprecedented in size and scope, would be expected to lead to the killing of hundreds of trees and the consumption of terabytes of bandwidth to accommodate press outrage over high CEO pay coupled with workforce reductions — especially if a politically incorrect company were involved.

But for Ford, I’m supposed to believe all of this is just a bad break caused by bad market conditions.

Give me a break.

Cross-posted at NewsBusters.org.

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1 Comment

  1. I have a 98 Contour that I purchased from my Grandmother before she passed away.

    Previously, I had an 91 Integra.

    The Integra with 235K on it had better mechanicals when I sold it than the Contour with 50K. It has an atrocious suspension, the interior is crap, the transmission (auto) feels like it was a very early prototype, it never goes through the gears the same way twice, and will bang heavily second gear for no reason other than driveline distress, the visor hits the rear view mirror when moved into place, and then doesn’t cover 50% of the side glass when moved to the side, it’s useless, the shocks are gone, and couple that with a lightly sprung car, it flops and flails and lurches DANGEROUSLY all over the place over these lovely Michigan roads. And it has an engine that would be more at home in a go kart.

    My entire family has benefited from Ford, and still does, but I will not purchase another Ford due to the absolutely lousy Contour. If they had the nerve to put this kind of crap on the road, why should I trust them again.

    And if they can’t engineer a decent car with the bloated wage structure they have, I don’t see why the are in business.

    They might just as well become a marketing organization.

    Comment by E. Buzz Miller — January 27, 2008 @ 11:37 am

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