In an unprecedented move for corporate America, Ford Motor on Thursday said it would give its 350,000 employees free Hewlett-Packard personal computers and printers, as well as Internet access for a cut-rate monthly fee of $5.
US employees who accept the offer will begin receiving the computers in the second quarter, and the No. 2 automaker will roll out the plan globally within 12 months, Ford said.
Along with the computer and printer, each hourly and salaried worker will receive two electronic-mail addresses and more if they ask. Employees will also be allocated 10 megabytes of space each to build a personal Web site.
Ford`s move is based on the idea that "the Internet will be the equivalent of the moving assembly line of the 21st Century," said Ford Chairman William Clay Ford Jr., whose great-grandfather was the pioneer of the car assembly line.
In addition to the benefits of having a "wired" work force, Ford has come up almost sure-fire way to improve relations with its employees, analysts said.
"At least for goodwill to the employees, it seems like a net-net win for Ford," said Mark Corcoran, an analyst at D.A. Davidson & Co.
Ford Chief Executive Jac Nasser said the program was part of the automaker`s strategy of staying on top of fast-moving electronic business developments as it strives to be consumer-driven.
"We want our employees to experience what is going on in technology," Nasser said at a news conference, held at the headquarters of the United Auto Workers union.
For Palo Alto, Calif.-based Hewlett-Packard -- one of Ford`s leading fleet customers -- the deal represents a major order. If 300,000 workers took up Ford`s offer, as Hewlett-Packard expects, it would equal 7.5% of the four million personal computers the company shipped in the United States last year, according to International Data Corp.
Internet access will be provided through UUNET, a unit of MCI WorldCom.
Hewlett-Packard`s stock rose 3 to 113-9/16 at the 4 p.m. New York Stock Exchange close, while MCI WorldCom shares ended off 7/8 at 44-1/8 on Nasdaq.
The base computer offered is a 500-megahertz HP Pavilion with 64 megabytes of RAM, a 4.3 gigabyte hard disk, CD-ROM, 15-inch monitor, speakers and a 56K modem. The base printer is a color DeskJet 610. Workers can upgrade both the PC and printer for an undisclosed price. Notebook computers are not included in the deal.
Hewlett-Packard officials declined to put a dollar value on the PC and printer. The company`s Web site had similar base PCs and printers for about $1,000.
PeoplePC of San Francisco will manage the program for Ford. According to PeoplePC Chairman Nick Grouf, Ford is subsidizing the $5-a-month Internet fee, which represents a substantial discount to the $24.95 PeoplePC typically charges to other customers as part of a package when they buy less-sophisticated PCs and no printer.
Ford, PeoplePC and Hewlett-Packard executives would not disclose financial terms of the deal.
After signing on, the Internet connection will bring users to a customized screen that will offer links to other products and discounts, allowing Ford to benefit from advertising revenues. Even so, the program will not be supported exclusively by ads.
"We are not going to flood the screen with advertising," said Ford Chief Information Officer James Yost.
Executives said the arrangement would work like this -- employees will get the PCs for three years, as well as three-year parts and labour warranties. If they leave the company, they would have to give the computers back, though Ford may come up with a payment plan allowing them to keep the machines. Details have yet to be worked out.
Workers at Ford`s Visteon parts unit could also participate even after the subsidiary is spun off this year. Workers at Ford`s Mazda Motor Japanese affiliate are not eligible.
Although Ford will have e-mail addresses for all of its employees -- Nasser currently communicates with Ford`s white-collar employees via a weekly e-mail newsletter -- the company will not be able to track the Internet activity of its workers, Yost said.
Still, the company will control what employees first see when they log on to the Internet. But that doesn`t bother Brenda Johnson, a member of UAW Local 900 and worker at the Michigan Truck plant in Wayne, Mich.
Johnson, who does not currently own a PC, said she especially welcomed the opportunity to get a computer she can upgrade. "I am very excited by it," she said.
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