Automotive Components Holdings continues contract buy-outs

Automotive Components Holdings LLC has added a college option to contract buy-outs offered to United Auto Workers union members at its Tulsa, Oklahoma glass plant.
The firm is the Ford Motor Company-…

Automotive Components Holdings LLC has added a college option to contract buy-outs offered to United Auto Workers union members at its Tulsa, Oklahoma glass plant. The firm is the Ford Motor Company-controlled temporary entity that took over control of 23 former Visteon Corp. auto parts factories in October 2005. It began buying out contracts later in the year in order to make the company a more attractive proposition in the run up to a sell-off of plants. Eric Mitchell, a spokesman with Automotive Holdings, said 17 February 2006 that the company would begin another round of buyouts in the week commencing 20 February 2006. However, this time, Automotive Components has added a college option that includes tuition, a stipend of half the worker“s income for the four-year period, as well as a continuation of medical benefits, he said. “This way, workers can have the chance to pursue a new career, pick up a new trade or prepare themselves for a variety of jobs in the future,” Mitchell said. Mitchell said the buyouts, which are voluntary, include options such as a lump sum of up to USD 100,000, depending on seniority, or a retirement package of USD 35,000 plus a continuing pension. He did not say whether the college option would be more cost-effective for the company than other buyout options although he said the company expected the college option to appeal more to younger employees. About 1,500 of the buyouts have already taken place, with the remaining 3,500 UAW contracts to be purchased over the next two years. The workforce at the Tulsa plant has declined from 725 employees in October 2005 to 700 now, Mitchell said, although it is not scheduled for closure. Mitchell said the 5,000 contracts to be bought out from 18,000 in 23 facilities in the United States and Mexico will be undertaken in different proportions in each factory, depending on each facility“s needs. The buyouts should help Automotive Components become a more attractive company, he said. “We“re preparing these plants for sale, and we“re working to make them efficient and competitive,” Mitchell said. Visteon was spun off by Ford in 2000 but lost money nearly every quarter afterwards. Company officials at the firm blamed the poor performance on production cuts at Ford, lower prices for parts and high labor costs.