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News of  December 05, 2001

Ford Announces Additional Turnaround Actions

DEARBORN, Mich. – Ford Motor Company announced further actions related to the ongoing restructuring of its global operations.

Ford will make several changes to salaried compensation and health care benefits, including the suspension of company matching contributions to the 401(k) plan in the U.S. Ford will also eliminate the second shift at the Edison Assembly Plant in Edison, N.J. These actions are expected to save the company about $300 million after taxes annually.

"These plant and benefit actions, while painful for our employees, are necessary as we confront a serious situation," said Chairman and CEO Bill Ford. "More tough decisions will follow in the months to come. However, we are confident that by building on our inherent product strengths, we will succeed as the best car and truck company in the world."

Among the benefit changes for salaried employees and retirees:

• The company matching contribution to the U.S. 401(k) (Savings and Stock Investment Plan) will be suspended Jan. 1, 2002, for an unspecified period of time.
• Merit increases for about 2,200 top-level managers globally have been eliminated for 2002.
• Health care premiums and prescription drug co-pay will be increased for 2002 for U.S. salaried employees.
• U.S. salaried retirees will begin making monthly contributions toward the cost of their health care plans in June 2002. The Ford Medical Plan continues to be available at no cost for 2002.
• The shift elimination at Edison Assembly will become effective Feb. 4, 2002.

Approximately 600 hourly workers and 30 salaried employees will be affected. The plant, which produces the Ford Ranger compact pickup truck, will reduce annual production by 84,000 units.

"Ford has always provided its employees and retirees with generous and fully competitive pay and benefit programs," said Chief Operating Officer Nick Scheele. "Even with these changes, our total compensation for salaried employees and health care benefits for salaried employees and retirees remain among the best in the United States – both inside and outside the auto industry."

(Dec. 3, 2001)

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