I agree, Ford is shedding excess capacity and staffing levels more quickly than GM. The union has even agreed that Ford can bring in cheaper replacement workers:
Ford can hire lower-paid temps
Under deal with UAW, company can use temporary factory workers at $18.50 an hour to replace buyouts.
Bryce G. Hoffman / The Detroit News
Ford Motor Co. will be able to replace workers who take advantage of one of the automaker's buyout offers with lower-paid temporary workers under an agreement negotiated with the United Auto Workers.
But the company expects to fill most vacancies with replacement workers from factories that were once part of Visteon Corp., Ford's former parts unit.
"We do have the right to hire temporary workers," Marty Mulloy, Ford's vice president of labor affairs, told The Detroit News. Mulloy said some specifics of the deal are still being hammered out with the union.
What is known is that Ford will be able to hire temporary workers at a starting wage of $18.50 an hour, with no benefits. The average Ford wage is $31.64 an hour. After 90 days, the temporary workers will be eligible for holiday pay. After about seven months, they will become eligible for health insurance and higher wages.
Ford is preparing to offer eight buyout packages to all of its 75,500 U.S. hourly workers in a bid to cut up to 30,000 factory jobs in North America. Workers must sign up by the end of November, but do not have to leave until Sept. 1, 2007.
Ford spokeswoman Marcey Evans said it is too early to tell how the use of temporary or transfer labor might affect Ford's quality and productivity.
Until Ford knows how many workers are leaving, and from which plants, it cannot effectively assess the challenges, she said.
The expanded union buyout program is part of Ford's accelerated restructuring plan, announced on Friday, which also aims to eliminate 14,000 white-collar jobs through buyouts and, if necessary, involuntary layoffs.
Ford, which lost $1.4 billion in the first half of the year, hopes to cut North American operating costs by $5 billion and become a smaller and leaner automaker that can better compete against foreign rivals.
Using temporary workers could be a significant cost-savings and could help boost Ford's standing with investors, who drove the company's stock price down 12 percent Friday on fears the revamped restructuring plan still doesn't cut deep enough.
"The Street will like that," said Bradley Rubin, an analyst with BNP Paribas in New York. "Obviously, you need someone to replace the people who are leaving and keep the lines running. Being able to give them low pay and no benefits is a plus financially."
Ford says it expects to use such labor on a limited basis.
"It really depends on the take-rate for the buyouts," said Ford's Evans. "Our first priority is to flow back employees from ACH."
ACH, or Automotive Components Holdings LLC, is the holding company set up by Ford last year to manage most of the former Visteon Corp. factories the automaker took back as part of a bailout deal with its former parts subsidiary.
ACH is charged with preparing those plants for eventual sale, but Ford said last week it will close any plant that doesn't have a buyer by the end of 2008.
Ford has yet to sell any of these facilities, and many of the workers at these plants are eager to get jobs at Ford plants.
"There are a lot of people at those factories who see this as their last opportunity to get into a Ford plant and earn $75,000 a year," said Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor. "I don't think they're going to be hiring too many temporaries."
McAlinden said the deal between Ford and the UAW on temporary workers is almost identical to an agreement reached earlier this year between the UAW and General Motors Corp.
Of more than 34,000 GM workers who took buyouts, 24,000 have left the company, GM spokesman Dan Flores said Monday.
GM has hired several hundred temporary workers at various plants and also has been filling openings with employees from Delphi Corp., GM's former parts subsidiary, Flores said.
Delphi, which also offered buyouts to its hourly work force, has said it has hired more than 2,000 temporary workers.
