Buffalo News (New York), September 16, 2006, Saturday

Copyright 2006 The Buffalo News
All Rights Reserved
Buffalo News (New York)

September 16, 2006 Saturday
FINAL EDITION

SECTION: NEWS; Pg. A1


HEADLINE: Automakers' buyouts are mixed blessing;
Severance incentives, while keeping industry viable in WNY, contribute to 'huge erosion' of middle class

BYLINE: By Fred O. Williams and Matt Glynn - NEWS BUSINESS REPORTERS

BODY:
The incentives Ford Motor Co. dangled Friday to coax workers out the door are the latest in a string of similar offers that are taking a bite out of Buffalo's auto industry -- while keeping local plants standing.
The incentives to retire or just quit will pay Buffalo-area autoworkers tens of millions of dollars in bonuses, but subtract about 2,000 of their well-paid jobs from the local economy.
Ford joined other automakers Friday in offering its workers severance incentives, in its case between $35,000 and $140,000 before taxes.
The metal stamping plant in Hamburg will boost the departures with Ford's package of eight different incentive plans, which are open to all of its 1,340 blue-collar workers.
Similar moves already under way at General Motors and Delphi will erase more than 1,700 jobs in Erie and Niagara counties once they take full effect by year's end.
"These are the good-paying jobs you could get without a college degree," said Arthur Wheaton, an instructor at the Cornell Industrial and Labor Relations School. With the auto sector's downsizing, "you've seen a huge erosion of the middle class."
But fewer workers making more goods is "a trend that a lot of manufacturers have [implemented] to remain competitive," said Richard Deitz, regional economist at the Federal Reserve Bank of New York's Buffalo Branch.
The Buffalo region's auto components sector declined from 14,800 jobs in 2000 to 9,900 last year. The incentive cuts announced this year will subtract more jobs than in any previous single year.
Ford's metal stamping plant on Route 5 in Hamburg's Woodlawn section, which it calls its Buffalo Stamping Plant, came through the sweeping restructuring announced Friday relatively unscathed. The automaker is closing nine plants by 2008, including a metal stamping plant in Ohio, while shifting some assembly work closer to the Hamburg plant.
As a result, local workers will make all the stamped body panels for a new, Fairlane-based "people mover" that will replace the Freestar minivan in Oakville, Ont., Ford said.
That work comes on top of the job of producing parts for the Edge crossover vehicle that swings into full production next month in Oakville.
In addition, the Hamburg plant is in line to make parts for the Lincoln Town Car, which is moving to St. Thomas, Ont., from a plant to be closed in Wixom, Mich. The Town Car will be produced alongside the Ford Crown Victoria/Mercury Grand Marquis at the St. Thomas assembly plant, which is an important customer for Buffalo.
"There's a good possibility they may shift some of the stamping work to Buffalo," said Charles Gangarossa, president of United Auto Workers Local 897 in Hamburg.
The incentive programs will open in mid-October and the number exiting should be known by late November. Nearly 400 of the local plant's 1,340 production workers are already eligible for full retirement, Gangarossa said.
Among the incentives is $35,000 for workers eligible for retirement and $100,000 for younger workers with at least a year of service. Others may get $140,000 for taking retirement and giving up post-retirement health care and life insurance benefits.
Ford's plans were on the minds of workers leaving the Woodlawn plant on Friday. Greg Switala of Angola said he won't take the offer.
"It's really hard for me because I'm caught in the middle," Switala said as he sat behind the wheel of his Ford Focus.
Switala has worked at the plant for 22 years and is only eight years away from full retirement. To him, a $100,000 buyout, especially after taxes, would only go only so far.
"After that, I would have nothing," he said. "It doesn't benefit me at all."
But for Mike Goergen, Ford's plan is a good fit. The 58-year-old Hamburg resident has worked at the plant for 34 years, making him eligible for full retirement. "I was planning on retiring in a couple of years, so it was an incentive to do it," he said.
Tonawanda resident Toby Mazur said he needs to keep working at the plant because he has only 15 years of service there. "I have to stick it out."
If a large contingent leaves the plant, Hamburg may import transfers from shuttered locations or even hire temporary workers, Gangarossa said.
Ford can hire non-union temporary workers in some situations under its UAW contract, a spokeswoman said.
"We will staff our plants so we can run them efficiently," Anne Marie Gattari said.
Company-wide, Ford announced plans to cut about one-third of its salaried work force and up to 30,000 production jobs in North America within a year, accelerating its "Way Forward" program to adjust to a dramatic upheaval in the auto industry. Nine plants will be shut down through 2008, two more than previously announced.
"The business model that served us for decades no longer works," incoming chief executive Alan Mulally said in a conference call Friday. High gas prices and changing tastes are quickly undercutting sales of pickups and other larger vehicles, forcing a quick switch to smaller and more fuel-efficient vehicles and more SUV-like "crossover" cars.
Economists said productivity-boosting moves are the price of saving manufacturing plants.
Deitz said the changing economy can make up jobs in other areas, and the important thing is for automakers to sharpen their productivity and competitiveness, in step with trends sweeping the manufacturing sector.
Once they take full effect by year's end, retirement incentives will cut 639 workers from GM's engine plant in the Town of Tonawanda, the company said, leaving its work force at 1,960. At least another 1,100 are exiting Delphi Corp.'s plant in Lockport -- the total is undetermined because one offer is still pending, spokesman Lindsey Williams said. Several hundred of the Delphi workers are being replaced by temporaries, but at about half the union wage of $27 an hour.
e-mail: fwilliams@buffnews.com; mglynn@buffnews.com

GRAPHIC: Bill Wippert/Buffalo News Ford Woodlawn plant employee Toby Mazur says he won't take the buyout.