Things are looking up for Ford Motor Co.

As a major part of it's "Way Forward" plan, Ford Motor Co. (F) had a goal of buying out 25,000-30,000 of it's 83,000 union workers. As of a few days ago, the rumor going around was that only 15,000 were going to take the offer - a stunning blow to management's plan for a turn around.

This morning it was announced that Ford had managed to buy out 38,000 of the union workers. Although the workers will be unemployed in the short term, from the sound of it these buy out offers will be good for the economy in the long term.

"The eight packages offered to employees ranged from $35,000 to $140,000 depending on their years of service, age and how close they are to retirement. One four-year package offered up to $15,000 per year for college tuition, plus half of the workers' salaries and health benefits. Another offer paid 70 percent of employees' salaries and tuition for two years."

And it appears that it will accelerate the cost cuting measures by Ford. Quoting from an article in this morning's Wall Street Journal [$$]

"Bear Stearns analyst Peter Nesvold said that his initial read of the attrition program is that Ford will increase its 2008 cost-cut target by roughly 6.7%, or $335 million. "While we were pleasantly surprised with the results, at this time we do not interpret them as materially greater than expected," Mr. Nesvold said in a note to investors."

In addition, Ford stated that it expects cash burn to be $17 Billion in 2007-2009. In the past, Ford has stated that it expects to be returned to profitability by 2009. The $18 Billion that Ford recently borrowed against it's assets will keep the company in a strong cash position so it can meet it's current obligations until the expected return to profitability.

Although there are still plenty of tough times ahead for Ford, it sounds like management is finally making progress on it's turnaround plan. The next big step would be for them to stop building so many cars with questionable design/build quality/reliability and start designing products that can actually compete with their Japanese competitors.