Nearly Half of Ford Workers Accept Buyouts

The automaker says 38,000 of its hourly employees elect to leave.
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Ford

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said Wednesday that around 38,000 workers represented by the United Auto Workers union accepted its buyout offer and plan to leave the company.

The reduction would amount to nearly 46% of the automaker's 83,000 workers that were represented by the UAW at the start of the year.

Ford's buyout offer to unionized employees was part of its sweeping restructuring efforts aimed at lowering costs and cutting the size of the company down to a level that better fits its dwindling market share. It follows a similar program executed by its rival,

General Motors

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, which was successful in reducing head count without raising the ire of organized labor.

Both Ford and GM are striving to restructure their struggling businesses without sparking a conflict with the UAW. The companies are facing important negotiations with the union next year that are viewed on Wall Street as a key to lowering their bloated cost structures in order to better compete with foreign-based competitors, such as

Toyota

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and

Honda

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.

"While I know that in many cases decisions to leave the company were difficult for our employees, the acceptances received through this voluntary effort will help Ford to become more competitive," said the company's new president and CEO, Alan Mulally, in a press release.

The company said roughly 30,000 workers accepted its buyout offer on a preliminary basis during an open enrollment period that ended this week. Another 8,000 workers accepted offers made earlier in 2006 during targeted plant-by-plant buyout offering.

Ford said just over half of the buyouts accepted during the recent open-enrollment period were by employees who accepted so-called "non-traditional packages," which provided options such as lump-sum payments, tuition reimbursements or scholarship funds for family members.

Those workers who accepted buyout packages during the period will begin to leave the company in January 2007 and continue to depart through the course of the year until all separations are completed by Sept. 1, 2007. They still have an opportunity to rescind acceptance up until the time of they leave.

Ford shares recently were up 18 cents, or 2.2%, to $8.33.