Ford slashes benefits for white-collar workers, will lay off 600 at truck plant
Monday, December 3rd 2001, 12:00 am
By: News On 6
DETROIT (AP) _ Ford Motor Co. said Monday it will reduce retirement and health benefits for 45,000 white-collar workers and lay off 630 people to save about $300 million a year.
``These plant and benefit actions, while painful for our employees, are necessary as we confront a serious situation,'' chairman and chief executive William Clay Ford Jr. said.
He also warned of more cuts as the nation's No. 2 automaker seeks to return to financial health. Ford had said in August that it would cut 4,000 to 5,000 salaried positions by the end of 2001.
On Monday, Ford said it was suspending matching contributions on 401(k) plans for its 45,000 U.S. salaried employees. Ford had added 60 cents in company stock for every dollar employees contributed, up to 10 percent of their annual salary.
The company will also boost health care premiums and prescription drug co-payments for the salaried workers, while eliminating merit pay increases for the top 2,200 executives worldwide next year.
The layoffs will come in Edison, N.J., where Ford said it was cutting one of two production shifts at a pickup truck plant, effective Feb. 4.
Ford has been plagued by eroding sales, as well as questions about vehicle quality and the recall of millions of Firestone tires.
Jim Hall, vice president of industry researcher AutoPacific, said the across-the-board benefits cut could help morale and productivity.
``It beats layoffs,'' Hall said. ``When you lay off people, you affect the people who lose the jobs and the people who fear they're next.''