Forum can't offer buyouts

Workers have an extra week to take a limited incentive to cut hours.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Forum Health said it lacks the cash to offer buyouts to employees as General Motors Corp. and Delphi Corp. have done.
The health care provider said in a newsletter to employees this week that no early retirement package is being considered.
The company's Voluntary Reduction Package, which was announced last week, offers health and life insurance for up to a year for employees who move from full-time to part-time status. Employees who resign would receive career coaching seminars.
Different package
The benefits are far from what GM and Delphi have offered their employees to quit or retire. Those companies are offering payments of $35,000 for employees with 30 or more years of service who agree to retire with full pensions.
Employees with 26 to 29 years of service can stop working, receive partial pay and then full pensions when they reach 30 years. Those with fewer years of service would receive payments of either $70,000 or $140,000 to leave the company.
Forum's comments in the newsletter were in response to a question presented by an employee.
Forum said its program was designed to appeal to employees who are nearing retirement and were only staying on the job for a few months until they qualify for Medicare.
The deadline for registering for the program was Friday but has been extended one week. Forum said not all employees were notified as quickly as planned, and it wants them to have time to learn about the program.
Finance questions
Another question in the newsletter asked why Forum was continuing to ask for labor concessions when it made money in May.
One month's profit "does not make for a profitable year," the newsletter said. Forum continues to project a "significant loss" for this year.
Forum still needs to bring its wages, benefits and productivity in line with market averages to be profitable for the long term, the newsletter said.
Dr. Keith Ghezzi, Forum's interim president and chief executive, said last week that the organization posted a profit of $1.5 million from operations in May, compared with a loss of $8.5 million in February. That loss caused Forum to predict a shortfall of $60 million this year if it didn't receive concessions from employees.
Union officials have said since then, however, that the losses won't be as bad as Forum predicted and think Forum's demands for concessions are going too far.
Forum says it lost $16 million on operations through May. It is working on a new plan of operations, which will include fewer employees, a smaller budget and improved productivity, Dr. Ghezzi said in the newsletter.
He said he is optimistic of Forum's success but reiterated that he can't rule out a bankruptcy filing or large layoff.
shilling@vindy.com