Ford Motor Co. offering severance incentives
DETROIT -- Ford Motor Co. is offering buyouts of $100,000 each to workers who lose their jobs to plant closures if they agree to give up all benefits except their pensions.
The severance option is among five being proposed to workers as Ford moves ahead with its plan to close 14 plants by 2012, a move that will affect roughly 30,000 employees.
So far, the company is offering the deals to workers from idled plants in Edison, N.J., and Loraine, Ohio, Ford spokeswoman Marcey Evans said Tuesday. She said the company expects to start offering them soon to workers at the St. Louis factory scheduled to close by the end of March.
United Auto Workers
The company hopes to offer them to workers at all idled plants, but they must first be approved by the United Auto Workers in each location, Evans said.
Under Ford's current agreement with the UAW, which expires in 2007, the company can't permanently lay off workers without continuing most of their pay and benefits.
Ford expects to achieve half of the job cuts through attrition. The incentive options are designed to encourage the rest to leave voluntarily, Marty Mulloy, Ford's vice president of labor affairs, told The Detroit News.
"As difficult as these plant actions are, we want to try to minimize the impact on employees in so far as we can," he said.
Besides the $100,000 buyout, other offers include a tuition reimbursement program, two early retirement programs and a preretirement leave program for those just short of the 30 years needed to retire.
Workers opting for the tuition program will receive up to $15,000 per year for four years along with medical benefits and half their regular pay.
The first retirement option, for workers 55 and older who have 30 or more years of service, offers $35,000 and full retirement benefits to those who retire immediately. The second retirement option, for workers 55 and older who have 10 or more years of service, offers a lifetime fixed income that is lower than that offered through the regular retirement program.
The preretirement program, for workers with at least 28 years of service, offers those who agree to take leave 85 percent of their pay until they reach the 30-year mark.
On Tuesday, state Rep. David Law introduced legislation to make the proposed buyouts exempt from state income tax in Michigan.
"The last thing these families need at a time like this is state government taking a bite out of their severance package," Law said in a statement.
House Speaker Craig DeRoche expressed support for Law's legislation.
Evans said she could not comment on the initiative since none of the incentive packages are currently offered in the state.