US manufacturer Ford is retrenching 630 workers and cutting retirement and health benefits for about 45 000 white-collar workers as it tries to reduce further costs.
US manufacturer Ford is retrenching 630 workers and cutting retirement and health benefits for about 45 000 white-collar workers as it tries to reduce further costs.
The manufacturer expects this move to save about R30 billion a year. Ford is cutting 600 jobs by eliminating one of two production shifts at its pick-up assembly plant in Edison, New Jersey. The number of pick-ups built at the plant was expected to be reduced by 84 000 a year.
About 30 salaried workers at the plant, which produces the Ranger compact pickup, would also be affected, Ford said.
Ford retrenched 5 000 white-collar workers earlier this year. The job cuts are part of a turnaround plan at Ford that company officials plan to unveil in January.
The company has also eliminated merit pay increases for Ford’s top 2 200 executives worldwide in 2002, and will be suspending its employee retirement plan, which means it will not match contributions for its about 45 000 salaried staff. Ford previously added 60 cents in company stock for every dollar employees contributed to the fund, up to 10 per cent of their annual salary. The staff will also have to pay higher health care benefits.
“These plant and benefit actions, while painful for our employees, are necessary as we confront a serious situation,” chairman and chief executive officer Bill Ford said in a news release. He said the cuts would probably not be the last at the company.
“More tough decisions will follow in the months to come,” Ford said. “However, we are confident that by building on our inherent product strengths, we will succeed as the best car and truck company in the world.”
Nick Scheele, Ford’s chief operating officer, said that, despite the changes to benefits, it was still a good place to work. “Even with these changes, our total compensation for salaried employees and health care benefits for salaried employees and retirees remain among the best in the United States, both inside and outside the auto industry,” Scheele said.
The manufacturer is expected to report a loss in the fourth quarter. It would be the first time since 1992 that Ford has reported three consecutive quarterly losses.