USA TODAY International Edition
Ford details plan to cut 1,400 salaried workers
Ford Motor Company alerted its employees early Wednesday during a weekly virtual global meeting that the automaker plans to trim its head count by 1,400 salaried workers by offering them an opportunity to retire this year if they meet certain qualifications. Kumar Galhotra, president of the Americas & International Markets Group, who oversees the profit and loss of the business units, told workers the news. He then followed up with more details via email.
The letter from Galhotra emailed to Ford employees said:
“We’re in a multiyear process of making Ford more fit and effective around the world.
“We have reprioritized certain products and services and are adjusting our staffing to better align with our new work statement.
“Toward this goal, we plan to offer a voluntary incentive program for U. S. salaried colleagues in some functions who are retirement eligible as of Dec. 31, 2020:
● The program will be available across certain skill teams, including in corporate functions that support the North America businesses and Ford credit
● Some skill teams will limit eligibility based on critical skills and/ or critical talent
● Eligible employees will get details about the voluntary incentive program on Sept. 8 and can accept the program offer up to Oct. 23, and
● Approved participants would leave Ford by the end of the year
“Your skill team leader will inform you today if your team is participating in the program. Our hope is to reach fitness targets with the voluntary incentive program. If that doesn’t happen, involuntary separations may be required.”
Details of who qualifies were not released publicly Wednesday, but a source close to the situation confirmed that salaried workers may apply for the “Voluntary Incentive Program” with:
● 30 years of service for those hired or rehired before Jan. 1, 2004
● 55 and older with 10 years of service
● 65 with 5 years of service
Early retirement is not automatic. Salaried employees must apply and then be accepted. The window opens Sept. 8 for those who qualify. Eligible employees will receive more details from the company.
“This is not an early retirement,” Ford spokesman Ian Thibodeau said. “This is an incentive for people today who are already retirement eligible.”
The Free Press reported Tuesday that Ford planned to cut 1,000 jobs in North America because of financial challenges not exclusively related to the pandemic. The company has said that people whose work is not “place dependent” may work remotely until January.
A directive to return to the office during the pandemic could influence a decision to take the offer, as health officials have said that people with heart conditions, asthma, high blood pressure and diabetes fall into the high- risk group for COVID- 19.
Ford has not determined when employees will return to the workplace, Thibodeau said.
What’s allowed
Bona fide retirement plans that have an age component are considered legal under the Employee Retirement Income Security Act; age discrimination does not apply.
If layoffs are made on the basis of age without an ERISA- compliant plan, that is considered age discrimination. This kind of retirement offer is favorable to companies because they can part with higher- paid workers. Those employees can then be replaced by new hires at a much lower cost.