Ford sees buyouts allowing it to cut payroll

The grill emblem is seen on a Ford F-150 truck during the Chicago Auto Show February 6, 2008. Ford Motor Co is aiming to come through a just-launched program of buyouts with a smaller U.S. factory work force, even after absorbing thousands of workers from former parts subsidiary Visteon Corp, a senior executive told Reuters on Tuesday.

DETROIT (Reuters) - Ford Motor Co (F.N) is aiming to come through a just-launched program of buyouts with a smaller U.S. factory work force, even after absorbing thousands of workers from former parts subsidiary Visteon Corp VC.N, a senior executive told Reuters on Tuesday.

Ford, which is aiming to return to profitability in 2009, this week offered all of its U.S. factory workers buyouts and early retirement incentives it says represent the last and best offers for employees to leave the struggling automaker.

An earlier round of buyouts cut almost 34,000 workers from Ford in 2006. This time, as part of a negotiated deal with the United Auto Workers union, Ford is offering richer terms for workers who opt for early retirement and added benefits for those who quit to start their own businesses.

The payouts, which will remain on offer to about 54,000 UAW-represented Ford workers until mid-March, include payments of $140,000 for workers who agree to forego a pension.

Ford is also offering richer payouts of $50,000 for unskilled workers and $70,000 for skilled workers who agree to retire early. In the last round of buyouts, those workers had only been eligible for a payout of $35,000.

Some 12,000 Ford factory workers -- or about 22 percent of its blue-collar work force -- are eligible to retire.

Other UAW workers with less seniority can opt to take a buyout of $100,000, have Ford pay for college or university expenses for four years while collecting half of their salaries or take $50,000 to start a new business with the automaker paying health care expenses for five years.

"We upped the ante this time for a reason," Joe Hinrichs, head of global manufacturing, said in an interview. Ford wanted to convey the message that workers would not see a similarly sweeping set of packages again. "We want to be able to use our cash for another reasons."

Thousands of UAW-represented workers at Chrysler LLC and General Motors Corp GM.N are also considering buyout offers negotiated with the union as part of ground-breaking contract settlement last year that cleared the way for the automakers to hire lower-cost workers and shift retiree health care costs to a union-aligned trust fund.

The restructuring is complicated at Ford because about 5,200 former Visteon workers have the right to return to the automaker under the terms of a 2005 bailout it negotiated with its former parts subsidiary.

Ford, which lost $2.7 billion last year, has set a deadline of the end of this year for selling off or closing former Visteon factories the automaker has maintained in a holding company while it seeks buyers.

Former Visteon workers at those facilities are eligible for the current round buyout packages and also have the option of taking cash incentives to remain with new owners that take over their plants.

Hinrichs said he expected the new buyouts would clear enough room in Ford's payroll to cover all the returning Visteon workers and still cut the factory work force, boosting the efficiency of Ford's remaining U.S. factories.

Ford does not plan to hire any new workers under the new lower wage deal negotiated with the UAW until 2009, he said.

Any decision to take a buyout package will be a binding decision for Ford workers, a contrast from the last round when workers were able to opt out of an early acceptance.

For that reason, he said, most workers would wait until the final days of the program to tender their decisions.

UAW President Ron Gettelfinger said last week that a weaker U.S. economy and slumping housing market -- particularly around Detroit -- could make this round of U.S. auto industry buyouts a tougher sell to union workers than it was two years ago.

Hinrichs said that was a concern, but added that Ford would look to actively promote the relative opportunity the buyouts represent for workers at a company still losing money in its home market.

"We certainly communicate openly that the company is still losing money in North America," he said. "This is the last time we intend to go enterprise wide, so we want people to consider it seriously for that reason."

(Editing by Tim Dobbyn)