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Ford worker buyout plan emphasizes self-directed retraining September 15, 2006

Posted by Tom in Education, Workforce.

The big business news today is that Ford Motor Company is radically downsizing its North American operations. Interestingly, there is an important Convergence-related them to the offer made to every union employee (thanks to the Detroit News for a summary of the buyout plan):

6. Educational opportunity program

UAW Ford workers who select this option will receive up to $15,000 of tuition a year for up to four years of college or vocational school and an annual stipend worth 50 percent of wages. Health insurance and other benefits continue during this four-year period, but pension credits do not accrue. Participants must enroll in school full-time (at least 12 credit hours per semester) and must maintain a “C” average to remain eligible.

At the end of four years, workers who select this option will terminate their employment at Ford.

7. Focused education opportunity program

Similar to previous option, except that UAW Ford workers who select this option will receive two years of tuition payments, up to $15,000 per year, and 70 percent of wages (minus cost of living adjustment).

8. Family scholarship program Retirement-eligible UAW Ford workers who elect this program agree to terminate their employment at Ford, and will receive an account totaling $100,000, which can be used for approved educational expenses for their children or spouses. Funds will be taxed. Funds will be available for a 10-year period.

That Ford offered and the UAW accepted this buyout program is a tacit admission by both sides that their autoworkers may not have the skills needed to succeed in today’s economy. Now, a worker can take a lump sum payment and be on their way…but these three options suggest that workers may be best taking a gift investment from Ford and educating themselves for the knowledge economy.

(Side note: Notice that the education apparently comes with no strings attached.  The workers are free to study whatever they chose.  Want to be a Registered Nurse?  Go ahead.  Want to be an IT professional?  Fine with the Blue Oval.  Interested in a philosophy degree?  Your call.  I suppose it’s wisest of Ford to let the workers make their own choices…but I hope the workers are given decent information on where education will result in the highest-paying, most stable jobs.)

I’d be fascinated to see how many take this path. The workforce research I’ve conducted indicates that an entrenched workforce in largely stagnant industries (like the domestic auto industry can be accused of being) generally lack ambition to do anything beyond what is required to receive benefit payments. In the office, we labeled this problem “the ambition gap” – as in, there is a lack of ambition to close the gap between the present skills and the future skills to maintain/grow income. Again, can’t wait to see the numbers.



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