Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Rod Lache from Deutsche Bank. Securities
Dan Galveston- Deutsche Bank Securities
This is actually Dan Galveston in for Rod. I had some questions around the cadence of the cost savings. Can you talk to approximately what level of savings dropped to the bottom line from the buy down program and the attrition program during this quarter?
Also, can you confirm that the savings from the Buffalo program is incremental to the $350 million restructuring savings you have been talking about?
Michael Simonte
First of all Dan, that Buffalo program is actually a few thousand and six and seven activity. It is part of the $350 million total cost reduction. My comment this morning was simply that there was a relatively small portion of the cash burden associated with buyouts in 2008 that related to that program.
The incremental cost savings, we have discussed many times that the $300 million of cost reductions that relate to the UAW agreements we negotiated in 2008, that these would start to kick in, in the third and fourth quarter of 2008. Our estimates are that we saw approximately $15 million of the savings associated with that. I am talking about net bottom line savings associated with that agreement come into our P&L base in the second half of 2008. The balance of the net bottom line savings, and probably on the order of $60 to $70 million of additional savings, will kick in almost immediately here in the first quarter of 2009.
Now the biggest driver of that, aside from the fact that many of the associates who left our company through the special separation program, in fact left our company during the third quarter; aside from that the benefit reductions, the elimination of post retirement healthcare at Three Rivers, the capped on post retirement health care at Detroit and Chief [Duvada] the elimination of defined benefit pension plan and of course the new defined contribution plan for our pension, all of these benefit changes, including contributory amounts on healthcare from our associates, these became effective on January 1 of 2009 and that is why it did not affect our business in 2008.
Dan Galveston- Deutsche Bank Securities
Thanks Mike, so you said that the benefit in the second half of ’08 was $15 million?
Michael Simonte
Yes, about $15, it was around $5 million or so in the third quarter and another $5 to $10, closer to $10 in the fourth quarter.
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