Our employees are our most valuable resource. We invest in their development, and they invest their time, talent and energy in the success of Ford Motor Company.
Our employees are the stakeholders most immediately affected by our restructuring. During 2005 and 2006, we took painful but necessary steps to reduce our salaried and hourly workforce as part of our efforts to return our North American operations to profitability. This reduction includes our elimination of the equivalent of nearly 5,000 salaried positions by the end of 2006; the additional reductions are being achieved through early retirements, voluntary separations and, as necessary, involuntary separations, with most employee departures expected to be completed by the end of the first quarter of 2007.
By agreement with the UAW, we also extended early retirement or separation packages to all U.S. hourly employees, including Ford employees at our Automotive Component Holdings LLC (ACH) plants. Through year-end 2006, about 37,000 hourly employees represented by the UAW had accepted (and not rescinded) an early retirement or separation offer. The vast majority of these employees are expected to separate from the Company by September 2007, though many of the offers include an opportunity for the employee to rescind acceptance until the time of separation. The accelerated plan to sell or close most ACH facilities by the end of 2008 will result in additional personnel reductions.
We have focused on handling these separations with sensitivity and assisting departing employees in preparing for new opportunities. Most of these separations have been accomplished through voluntary packages. See Sustaining Ford for more information.
In 2006, we negotiated new Ford collective bargaining agreements with labor unions in Argentina, Australia, Belgium, Brazil, France, Germany, Mexico, Russia, Taiwan, Thailand, United Kingdom and Vietnam. We will also negotiate new collective bargaining agreements at our Jaguar (UK) and Volvo (Sweden) affiliates.
In 2007, we will be negotiating 18 new collective bargaining agreements with labor unions in 15 different countries, as well as conducting negotiations with the UAW in the United States. These negotiations will include agreements with labor unions in Argentina, Belgium, Brazil, France, India, Mexico, New Zealand, the Philippines, Russia, Southern Africa, Spain, Taiwan, Thailand, the United States (hourly and salaried), Venezuela and Vietnam. We will also negotiate new collective bargaining agreements at our Land Rover (Britain) and Volvo (Sweden) affiliates.
Our agreements with the UAW and CAW represent the largest percentage of our unionized workforce. These agreements expire on September 14, 2007, and September 16, 2008 respectively. Historically, negotiation of new collective bargaining agreements with the UAW and CAW have typically resulted in increases in wages and benefits, including retirement benefits; some of these increases have been provided to salaried employees as well.
We remain concerned about the rapidly rising cost of providing health care to our active and retired employees in the United States. Although we are proud of providing excellent benefits for employees, controlling health care costs is critical to our competitiveness. See Legacy Health Care Costs for more information.
In 2005, business conditions forced us to suspend contributions to U.S. employees' 401(k) retirement plans. Contributions had initially been suspended early in 2002, but were reinstated in 2004 until we were forced to halt them again last year. In 2006, however, we did offer employees bonuses based on performance, and in June 2007 401(k) contributions will again be reinstated.
Employee Satisfaction
In 2006, 69 percent of our salaried employees participated in the annual Pulse survey, which provides feedback on employees' overall satisfaction with the Company, their jobs, diversity and other aspects of workplace satisfaction. The 2005 participation rate was also 69 percent.
The Pulse survey includes a total of 55 items, eight of which make up what we call the Employee Satisfaction Index (ESI). Sixty-two percent of respondents gave favorable ratings on the ESI in 2006, unchanged from 2005 levels. Compared with 2005, about 33 percent of the 55 items improved, 23 percent declined and about 44 percent remained the same.
Among the areas showing improvement were employees' satisfaction with supervision, workplace stress, workload, training, diversity and communications. In addition, employee satisfaction with actions being taken to improve quality maintained a high level of favorable employee satisfaction.
As part of our efforts to increase employee satisfaction, we are constantly improving our strategies for fostering open dialogue with employees. We know that communication is especially important during these difficult financial times and employee reductions. As part of these efforts, we hold weekly interactive webcasts with all employees, during which employees can submit questions directly to top executives. We also have a Web-based innovation idea submission and discussion forum.
