Time has run out for 75,000 Ford Motor Co production workers to make one of the biggest decisions they will ever have to make: Whether or not to leave the company by taking buyout or early retirement offers.
Ford, faced with lower demand for its products than in previous years, is hoping 25,000 to 30,000 of its workers will take one of the eight packages on offer so it can reduce manufacturing capacity to better match demand.
The deadline was late Monday night. Ford will announce the number of people taking the buyouts later this week.
Ford officials won't say how many workers have signed up for the offers so far, but they say they are pleased with the numbers. President of the Americas Mark Fields has said the company expects fewer than 40 percent of the workers to leave.
Before the latest round of buyouts was announced, Ford had made offers to workers at a limited number of plants, including those scheduled for closure, and about 5,200 workers decided to go, Ford said.
That means Ford needs about 20,000 more workers to take the new round of buyouts and early retirements to reach the low end of its target range.
Workers who sign up for a package can change their minds up until the day the package takes effect, the company said.
Guy Hamilton, building chairman for United Auto Workers Local 1250 at an engine plant in Brook Park, Ohio, near Cleveland, said it is too early to tell how many workers will take the packages.
Some could sign up today so they have the option to leave, but withdraw later, he said.
Local 1250 represents about 3,800 workers at the complex near Cleveland.
Ford lost US$7 billion in the first nine months of the year, and on Monday the company announced that it plans to get about US$18 billion in financing due to help staunch its cash flow losses and to pay for its restructuring.
Ford's share of the domestic market has declined from around 26 percent in the early 1990s to 17.6 percent at the end of last month.
The company expects to cut its costs by US$5 billion through 2008, with further unspecified reductions in 2009.
Ford has announced plans to close 16 plants as part of its "Way Forward" restructuring plan. Nine of the plants have been identified, but the company has not named the remaining seven.
Under the buyout or early retirement plans, workers can choose between eight packages that offer from US$35,000 to US$140,000 depending on their years of service, age and how close they are to retirement.
One package offers up to US$15,000 per year for four years of college tuition, plus half of the workers' salaries and health benefits for four years.
There is also an offer that pays 70 percent of their salaries and tuition, both for two years.
Deutsche Bank analyst Rod Lache, in a note to investors, said he expects a relatively low number of workers to take Ford's offers, in the range of 10,000 to 15,000. That's because only 28,000 of Ford's 75,000 hourly workers are eligible for retirement under the company's offers, he said.
Because it won't get enough workers this round, Ford likely will have to negotiate a new and potentially more costly buyout and early retirement plan as part of the upcoming labor negotiations next year, the note said.