Ford, UAW focus on job reductions

10/26/2007

DETROIT - Ford Motor Co. and the United Auto Workers have agreed in principle on the company's wish to further shrink its U.S. hourly work force as negotiations on a contract start to ramp up, according to a person briefed on the talks.

Industry analysts say agreement on the issue means Ford could close more factories beyond the 16 that it said would be shuttered under a restructuring plan announced last year. The company has identified 10 of the closures, but has yet to announce the remaining six. The closures are to be fully completed by 2012.

The job reductions would take place with early retirement and buyout offers similar to those made as part of the company restructuring plan announced last fall, said the person, who requested anonymity. How many workers would leave is still under negotiation, the person said.

Ford spokesman Marcey Evans would not comment on the talks other than to say they are proceeding at low levels while UAW leaders continue to campaign for ratification of the Chrysler LLC contract. Messages were left for UAW spokesman Roger Kerson.

Aaron Bragman, an auto industry analyst with Global Insight, said the buyout offers may sweeten the deal for what could be a painful contract for workers.

Ford is struggling to reduce factory capacity to match its U.S. market share, which has dropped from around 26 percent in the early 1990s to about 15 percent. Mr. Bragman said Ford may need to close plants beyond the 16 planned if its market share doesn't stabilize at 15 percent