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Ford Offering Buyouts to 98,000 Retirees

Maker hopes to shed 1/3 of U.S. pension liabilities.

by on Jun.01, 2012

While CEO Mulally doesn't appear to be retiring anytime soon, Ford is offering buyouts to as many as 98,000 current retirees.

Shedding debt and liabilities has become one of the key strategies for Ford Motor Co. CEO Alan Mulally, and the maker’s latest move is to offer buyouts to 98,000 salaried and white-collar retirees in an effort to trim by a third Ford’s overall $49 billion in U.S. pension liabilities.

The maker says it does not yet have a clear indication of how many of its retirees will accept the new offer but it needs to take steps to deal with a looming problem that has been weighing down its balance sheet.  On a global basis, Ford’s $74 billion pension liabilities were underfunded by $15.4 billion at the end of last year.

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The program will be rolled out in waves, according to a company official, with offers going out to between 12,000 and 15,000 retirees by the end of the third quarter.  The rest will roll out over the following year, with the offers being made by random selection.


Ford Offers Buyout to All 41,000 U.S. Workers

Automaker aims to cut costs after union rejects concessions.

by on Dec.22, 2009

Ford is offering buyouts of up to $70,000 to its 41,000 U.S. assembly line workers.

It could get difficult if all 41,000 of Ford’s U.S. factory workers were to accept the automaker’s latest buyout offer.  In fact, the company is hoping for a small but unspecified number of employees to accept the offer of up to $70,000 in cash as it looks to trim payroll costs.

A spokesman for Ford says the company is still struggling with “a surplus in employees,” as it struggles to right-size its production base.  Reduced capacity means fewer employees will be needed long-term.

Like its cross-town rivals, Ford has been using buyouts for a number of years to trim back its base of United Auto Workers Union-represented employees.  Last July, about 1,000 workers took the maker up on its most recent offer.

The new deal would put as much as $70,000 in cash in the hands of relatively new employees, while workers who are approaching retirement anyway could leave early and pocket an extra $60,000.


Ford is considered the strongest of Detroit’s Big Three automakers, right now, though that puts it in an awkward position.  It was able to skip the federal bailouts rivals General Motors and Chrysler needed to stay in business.  But its relatively strong cash position has made it difficult to sell workers on proposed concessions that would allow Ford to match the reduced labor costs at GM and Chrysler, post-bankruptcy.