Ford Motor Co. of Canada Ltd. workers will be offered as much as $125,000 and a $30,000 voucher to buy a new Ford vehicle if they agree to walk away from the company under a deal reached yesterday between Ford and the Canadian Auto Workers union.
The $125,000 is the maximum payout for skilled trades workers who are eligible to retire and also agree to give up any future health care benefits under the deal, which is designed to encourage as many workers as possible to leave Ford and reduce the number of layoffs.
"Will it solve the total problem? Probably not," Buzz Hargrove, CAW president, said yesterday. "But we are confident it will avoid many forced layoffs."
The new program provides higher incentives than retirement offers the union negotiated with Ford during contract talks in 2005, Mr. Hargrove said.
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Since then, however, Ford has announced the closing of its Essex Engine Plant in Windsor, Ont., and the elimination of one shift of production at its St. Thomas Assembly Plant as part of a major restructuring that involves the closing of seven vehicle assembly plants and nine components plants in North America.
The restructuring comes as the second-largest U.S. auto maker adjusts to years of market share declines and a plunge in sales of sport utility vehicles, which generated much of the company's profits through the 1990s.
The actions at Essex Engine and St. Thomas will eliminate close to 3,000 jobs. More than 30,000 members of the United Auto Workers in the United States have agreed to retire.
Those two plant closings follow the shutdown of the company's Windsor Casting Plant, which the CAW agreed to during the 2005 contract talks.
"This is going to be a much smaller company," Mr. Hargrove said.
The retirement incentive will be offered at all Ford locations in Ontario, he said, which means some positions could open up at an assembly plant in Oakville, Ont., or a parts depot in Brampton, Ont., and workers in St. Thomas or Windsor could be able to transfer to those cities.
Ford Canada spokesman John Arnone confirmed that an agreement has been reached.
"It has always been a top priority to minimize the impact on our employees and their families," Mr. Arnone said.
Ford retirement incentives
Non-skilled workers: $70,000, plus a $30,000 voucher to purchase a new vehicle
Skilled trades workers: $85,000, plus a $30,000 voucher.
Health care: Those who retire and agree to give up their health care plan will receive another $40,000
For those not eligible to retire there are also incentives.
More than one year, less than five: $50,000
More than five years, less than eight: $75,000
More than eight years: $100,000
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