Ford execs, workers to take pay hit
The company also is eliminating bonuses for all salaried employees for a second consecutive year and is suspending cash compensation for board members to help meet its goal of returning to profitability in 2011, according to a memo e-mailed to white-collar workers by the two executives Tuesday afternoon.
"We know these are challenging times and we all are affected by the tough actions we are taking," Ford and Mulally said in the memo, a copy of which was obtained by The Detroit News. "Both of us have voluntarily agreed to accept a 30 percent reduction in salary for 2009 and 2010."
The announcement comes as members of the United Auto Workers prepare to vote on a major amendment to their contract with Ford that includes new concessions and provisions for another round of buyouts for U.S. factory workers.
The tentative deal does not cut base wages, health benefits or pensions, but workers are being asked to give up cost-of-living pay increases, as well as performance bonuses that were worth $500 last year and an annual Christmas bonus worth $600, according to a summary of the agreement obtained by The News.
"Faced with catastrophic circumstances never seen before in our industry, your bargaining committee was determined to make the necessary sacrifices in a manner that would cause the least amount of long-term pain to our members and would protect as many jobs as possible," UAW President Ron Gettelfinger and Vice President Bob King, head of the union's Ford department, said in a memo Tuesday to Ford's hourly workers.
"Ford used up $21 billion of their cash reserves in 2008 and is burning through more than a billion dollars a month just to stay in business because revenue from sales have dropped so dramatically. The company cannot continue to sustain this level of losses and stay in business."