Ford to offer buyouts to all factory workers in North America
Number two US automaker speeds up cost cutting
Ford Motor Co., slashing production after battling a decade-long drop in US market share, is preparing to extend buyout offers to all its factory workers in North America, two people with knowledge of the plan said.
The step would reverse Ford's strategy of ``targeted" offers at specific plants and echo General Motors Corp.'s buyouts and early retirements, which helped GM shed a third of its United Auto Workers union employees this year. Ford had 82,000 UAW-represented workers at the end of 2005.
``Whatever GM gets from the UAW, Ford gets it three to six months later," said David Giroux, an analyst at Baltimore-based T. Rowe Price Group Inc., which owns 9.8 million Ford shares. ``That makes it very logical that Ford would start offering these buyouts now."
The buyouts are part of the latest restructuring after a $1.44 billion loss in the first half. Dearborn, Mich.-based Ford, the second-largest US automaker, said in July it would accelerate job cuts and last week said it was making the biggest production cuts since the 1980s later this year.
Chris Ceraso, a Credit Suisse analyst in New York, downgraded his Ford rating to ``underperform" from ``neutral" in a note on Ford titled, ``It's Worse Than You Think." ``Our sense is the market is not yet acknowledging how severely this production cut will hit Ford's earnings and cash flow," Ceraso said.
The company will reveal the buyouts and early retirements in September, said the two people, who asked not to be identified because the program isn't public. The moves would expand the ``Way Forward" plan made public in January to shed as many as 30,000 jobs and close 14 factories in North America by 2012.
``There's a lot of speculation about what we will do," said Oscar Suris, a Ford spokesman. ``We're not going to comment on the speculation. We'd rather talk about our specific decisions, and those we'll discuss next month."
A UAW spokesman didn't have an immediate comment.
GM this year offered buyouts worth as much as $140,000 each to all UAW-represented employees. About 34,000 accepted, or about one in three.
