Y2KGT Posted January 24, 2006 Share Posted January 24, 2006 Here is a question I have been thinking about for some time. Can Ford file for Bankruptcy for the North American operations ONLY? This Way Forward Plan seems like the LAST RESORT for them. How can they pay weekly 30,000+ people that will be in GEN Pool and still make a profit in North America? Any comments? Quote Link to comment Share on other sites More sharing options...
Twincam Harley Posted January 24, 2006 Share Posted January 24, 2006 Here is a question I have been thinking about for some time. Can Ford file for Bankruptcy for the North American operations ONLY? This Way Forward Plan seems like the LAST RESORT for them. How can they pay weekly 30,000+ people that will be in GEN Pool and still make a profit in North America? Any comments? I'll take a shot at this. The GEN fund is already established meaning it is funded. Maybe not for those kind of numbers but at one point I know there was $1 billion in it. I believe the affected UAW numbers will be 25,000 as the balance of the 30,000 is suppose to be white collar. Most of the 14 facilities named today will remain open until at least the end of the contract. Note that the execs were saying that these operations would cease by the end of 2008. Some will idle before but not all. So, you'll only have maybe 5 to 6 facilities "idled" prior to the end of the contract. The fund should sustain itself, if not, Ford will have to ante up until September '07. The UAW said today that they would rigorously enforce the job security language in our National agreement. As far as bankruptcy goes, it would be hard for Ford to declare based on the numbers shown to us today. 20 billion cash on hand? Wonder how they'd sell that? Not sure if they could file N.A. only. Quote Link to comment Share on other sites More sharing options...
sailorjohn Posted January 24, 2006 Share Posted January 24, 2006 I'll take a shot at this. The GEN fund is already established meaning it is funded. Maybe not for those kind of numbers but at one point I know there was $1 billion in it. I believe the affected UAW numbers will be 25,000 as the balance of the 30,000 is suppose to be white collar. Most of the 14 facilities named today will remain open until at least the end of the contract. Note that the execs were saying that these operations would cease by the end of 2008. Some will idle before but not all. So, you'll only have maybe 5 to 6 facilities "idled" prior to the end of the contract. The fund should sustain itself, if not, Ford will have to ante up until September '07. The UAW said today that they would rigorously enforce the job security language in our National agreement. As far as bankruptcy goes, it would be hard for Ford to declare based on the numbers shown to us today. 20 billion cash on hand? Wonder how they'd sell that? Not sure if they could file N.A. only. Wouldn't bet my future on GEN being around. Even paying GEN to only 10k employees will cost the company 1/2 billion a year, minimum. I think that may be why you're seeing buyouts being offered at places like Edison with the blessing of the union. GM has been pleading poverty paying GEN to only 5k workers, where does that leave Ford? If it is funded to the tune of $1B then 25k workers would draw that number down in very short order, the company isn't going to go bankrupt to pay people that aren't working. Quote Link to comment Share on other sites More sharing options...
Twincam Harley Posted January 24, 2006 Share Posted January 24, 2006 Wouldn't bet my future on GEN being around. Even paying GEN to only 10k employees will cost the company 1/2 billion a year, minimum. I think that may be why you're seeing buyouts being offered at places like Edison with the blessing of the union. GM has been pleading poverty paying GEN to only 5k workers, where does that leave Ford? If it is funded to the tune of $1B then 25k workers would draw that number down in very short order, the company isn't going to go bankrupt to pay people that aren't working. The letter from our Chairman told us that buyout incentives are coming. I'm sure you're correct that GEN will likely be gone in the next contract. What suprises me is that we have 20 months to go in this contract and if you're in GEN now, you'll draw about, what, $750 max per week in GEN? So, about 85 weeks of GEN left in this contract and at $750 per week, that totals about $64,000. So why offer $100,000 to employees? I guess the extra is for selling your seniority, call back rights and future pension if there is any? If they would offer me $200,000, or $10,000 per year of service, I will go and not look back. A person with 1 year of seniority shouldn't get the same buyout amount as a person with 20. Heck, a person with one year of seniority isn't even vested. I don't know why they just don't offer X amount of dollars per year of seniority to terminate rather than $100,000 if you have at least one year of seniority. They have to know that 95+% of the employees with 10 or more years are not likely to give up the pension they have earned for $58,000 after taxes. Quote Link to comment Share on other sites More sharing options...
Missouri Mule Posted January 24, 2006 Share Posted January 24, 2006 This subject was discussed on the "News Hour" on PBS tonight with Jim Lehrer. The bottom line problem appeared to be the jobs bank issue. I tend to agree. The "legacy" costs can be absorbed over time but not paying people for not working. That is unique to the auto industry and may well be its undoing. Quote Link to comment Share on other sites More sharing options...
Twincam Harley Posted January 24, 2006 Share Posted January 24, 2006 This subject was discussed on the "News Hour" on PBS tonight with Jim Lehrer. The bottom line problem appeared to be the jobs bank issue. I tend to agree. The "legacy" costs can be absorbed over time but not paying people for not working. That is unique to the auto industry and may well be its undoing. It certainly isn't good "business sense" to pay people not to work. However, this was agreed to by the Big 3 and they won't go bankrupt abiding by the agreement until the end of this contract. In 2007, the Big 3 will have the opportunity to negotiate a new contract and clean up some of what they've done to themselves. You can tell by their 2008 projections, that is their intent as they know they can't do it any earlier. Hopefully the UAW will be able to protect as many employees as possible when that time comes. I can only wonder what our current situation would be like had GM not repsonded with the 0% financing and the subsequent incentives following 9/11. What would have happened if they would have allowed time for the the American public to overcome their fears by enduring soft sales for 6 months or so? I believe people would have still bought cars without the Big 3 giving them away and profits would be higher as a result. The Big 3 may have still lost some market share to competition but I think they would have been still selling alot of cars at near normal profit and the damage wouldn't have been as severe. Once you start giving them away, it's hard to ween everyone off of that. In my opinion, GM panicked and the others followed. Now look. We're still selling a ton of cars but at little to no profit due to incentives. Quote Link to comment Share on other sites More sharing options...
Y2KGT Posted January 24, 2006 Author Share Posted January 24, 2006 GEN Pool pay is your normal hourly wage which is around $27.70 an hour if you are top scale which comes out to $1108.00 gross per week. Thats a bit higher than $750.00. I am sure almost all of the 30,000 workers getting laid off are at top scale. I can NOT see the GEN Pool fund last long with everyone collecting this weekly. Quote Link to comment Share on other sites More sharing options...
vertigo13 Posted January 24, 2006 Share Posted January 24, 2006 GEN Pool pay is your normal hourly wage which is around $27.70 an hour if you are top scale which comes out to $1108.00 gross per week. Thats a bit higher than $750.00. I am sure almost all of the 30,000 workers getting laid off are at top scale. I can NOT see the GEN Pool fund last long with everyone collecting this weekly. Why does everyone think that 30,000 people are going to get laid off? When they announced the revitilization plan in 2002 we had 170,000 hourly and salaried workers in north america, now, four years later we have 124,000 workers. In four years they shed 54,000 jobs. This new plan states that the jobs will be eliminated by 2012, thats 6 years from now. Half of the skilled trades workers are eligible to retire. Most of the jobs lost will be thru attrition. I feel for the low seniority worker at plants that will close, because they will get laid off for some time but they will be back. I don't have much seniority either, only 5 years, but I'm in the trades I think that I should be safe. If the old guys would just retire. There are guys at our plant that have 40+ years. From Woodhaven! Good luck to all!! Quote Link to comment Share on other sites More sharing options...
Footballfan Posted January 24, 2006 Share Posted January 24, 2006 Yes, a company can just file Bankruptcy in the United States and Canada. Regarding the GEN pool, even if it is eliminated, many of those 30,000 will now be loaded on the retirement ranks. However, the legacy costs will only grow with less revenue. This is a recipie for disaster as far as I am concerned. It is almost as if they are poising themselves for Bankruptcy- get all the retirees on the ranks, file, and then force the retirees to accept lower pensions. Quote Link to comment Share on other sites More sharing options...
supercrew04 Posted January 24, 2006 Share Posted January 24, 2006 in regards to a possible buyout, it would seem that securing affordable insurance would be more important than the value of a pension in my case, with 10 years seniority; I doubt that in 20+ years when I am eligible to retire, that my pension would be worth waiting for I should also point out that the timing of any offer would have to be such that it would make good financial sense in the short term as well to accept such an offer, or perhaps be relatively confident in one's ability to secure suitable employment in the near future Quote Link to comment Share on other sites More sharing options...
No1Eman Posted January 24, 2006 Share Posted January 24, 2006 Here is a question I have been thinking about for some time. Can Ford file for Bankruptcy for the North American operations ONLY? This Way Forward Plan seems like the LAST RESORT for them. How can they pay weekly 30,000+ people that will be in GEN Pool and still make a profit in North America? Any comments? It would be very difficult for ford to file bankruptcy. They are profitable, and have cash on hand, as well as future revenue that can satisfy their debt. Another important thing to consider is that the family maintains control of the company through their class b stock. ALL of this stock becomes worthless in the case of a bankruptcy, and new stock must be issued and sold. So they would have to buy it back again, after losing all that they had in the original stock. They couldn't do it. If the family wanted to give up that kind of control of the company, they would sell it, like Chrysler did. Quote Link to comment Share on other sites More sharing options...
Twincam Harley Posted January 24, 2006 Share Posted January 24, 2006 (edited) GEN Pool pay is your normal hourly wage which is around $27.70 an hour if you are top scale which comes out to $1108.00 gross per week. Thats a bit higher than $750.00. I am sure almost all of the 30,000 workers getting laid off are at top scale. I can NOT see the GEN Pool fund last long with everyone collecting this weekly. Well, what's 95% of your take home pay? Out of $1100, you probably clear $800? What's 95% of that? Ford doesn't have to pay you the $1100, just the 95% of your take home pay. Then you're taxed on that which reduces your payment even further. Edited January 24, 2006 by Twincam Harley Quote Link to comment Share on other sites More sharing options...
rn4 Posted January 24, 2006 Share Posted January 24, 2006 Well, what's 95% of your take home pay? Out of $1100, you probably clear $800? What's 95% of that? Ford doesn't have to pay you the $1100, just the 95% of your take home pay. Then you're taxed on that which reduces your payment even further. Thats Sub not Gen! Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.