Downsizing a company can give off a bad impression. The first thing that the people will automatically think off is that you’re losing money and in time (maybe a couple of years) your business will crash and the company will end up folding. It could also become demoralizing for the employees, especially those who’ve contributed ten or fifteen years of their lives for the company since they could end up losing their jobs. It just unfortunate that this has affected one of the companies which has been a staple in the automotive industry.
Due to the recent loses they’ve incurred for the year 2007, Ford Motors Company is offering a buyout to its hourly working employees. Based on reports Ford Motors lost a total of $2.7 billion which made them resort to buying out their current employees. Although the amount is huge, Ford Motors did better this year than in 2006 when they lost a grand total of $12.6 billion. That’s roughly almost four times the amount of last year’s losses.
What Ford Motors plan to do is to offer buyouts to 54,000 of its hourly employees starting with those who worked for the plants that were shut down. This includes the plants in Atlanta, St. Louis, Edison, N.J., and Norfolk, Va. Now that’s just for starters. Once done, Ford will then focus on the workers at the other Ford plants in the US. Ford Motors is also offering retirement plans to the workers who are qualified to retire. As of this date, the total number of employees qualified for retirement is 12,000. There are reports as well that once the company has worked on the hourly employees and retirees, their next target will be the salaried employees. In the long run, the company mentioned as well that they have not ruled out closing some plants to make up for the losses.
Once the old employees have been bought out, Ford Motors will work on hiring new employees but with a lower salary. It may seem cruel for the company to release people who’ve showed loyalty and dedication over the years and replace them by hiring new workers, but based on the salaries earned by the previous employees, the discrepancy is quite huge and it could help in improving the finances of the company. Based on an agreement that Ford has with the United Auto Workers (UAW), Ford Motors can pay off new employees $40, compared to the previous amount of $70 paid to their old employees. Now that saves the company $30 per employee.
The only question in everyone’s mind is how good the quality of Ford Motors car will be when it’s done by someone who is a bit inexperience compared to someone who’s been doing it for the last ten or twenty years. It’s true that young and new workers offer fresh ideas but veterans offer stability and experience. I guess all the consumers can do is to wait for the upcoming releases of Ford Motors to determine if the company made the right call.
Sources: Kicking Tires, USA Today








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