Ford: Half of hourly workers to leave
New acceptances bring to 38,000 the number of auto manufacturer's U.S. hourly employees taking offers; company sees $17 billion cash drain through 2009.
NEW YORK (CNNMoney.com) -- About half of Ford's 75,000 hourly workers have accepted the company's offers to leave, beating its target, and the automaker said it will see annual cash outflow of $17 billion through 2009.
About $7 billion of the drain will be connected with the employee departures, the company said in an SEC filing.
Ford announced in September that it intended to reduce its North American hourly work force by 25,000 to 30,000 employees by the end of 2008. It offered its 75,000 workers represented by the United Auto Workers union payments of up to $140,000 to leave the company.
Ford said the 30,000 acceptances it received before Monday's deadline join the 8,000 employees who accepted packages earlier in 2006 during targeted plant-by-plant buyout offers. That brings the number of buyouts to about 38,000, well above the target range.
The faster-than-expected take rate of various severance or retirement packages will allow Ford to speed up cost cuts and plant-closing plans as it tries to stem losses in its North American auto operations.
The company said it expects a cash outflow from 2007 to 2009 of $10 billion related to automotive operations and $7 billion for the restructuring efforts.
Workers had until Monday to sign up for one of the programs, although they have a week to change their mind. All of those who signed must leave the company by September 2007, when the current labor contract with the UAW expires.
The hourly job cuts do not include a Ford target of trimming 14,000 salaried staff. Some of those workers have already left the company, with Ford saying more job cuts are in the works.
Ford announced plans Monday to borrow $18 billion by pledging assets as collateral for loans, an unprecedented requirement that highlights its worsening financial condition.
When Ford announced the staff cut plans in September, the company said it did not expect to return its North American auto units to profitability until 2009, and that it would aim at a U.S. market share of 14 to 15 percent of vehicles sold, a target that could drop it to No. 3 in U.S. sales behind both General Motors (Charts) and Toyota Motor (Charts).
GM has also trimmed nearly 35,000 of its larger U.S. hourly work force of 120,000 workers as it also tries to return its North American auto operations to the black. The Chrysler unit of DaimlerChrysler (Charts) also has been struggling with losses, although it has yet to announce any staff cut plans.