Ford Motor Co. (NYSE: F) CEO Alan Mulally indicated this week that he will bow to a 30% pay cut in 2009 while the troubled automaker's salaried workers will forgo all bonuses. Not only that, but the UAW approved buyout concessions targeted for a March 9 strike date for other workers. Although Ford has not yet taken federal buyout funds like other Detroit automakers, the company still has massive financial hurdles to overcome.Mulally will give up all cash compensation this year as a tactic to get Ford's 42,000 UAW workers/members to accept pay freezes and other concessions. In other words, all employees, from the highest levels of management down to the factory floor workers, are all acting together to help the company so that federal bailouts won't be needed. It's too early, of course, to see if a move like this will be near enough to ensure Ford won't need a capital injection, but it's a good start.
Ford's stance of shared sacrifice here is a good model for other companies that need to look deep within themselves for possible solutions instead of lining up at the federal welfare table for handouts. Ford board member Bill Ford, who was CEO of Ford Motor until he was replaced by Mulally, has not taken cash compensation since 2005 and will also see his deferred compensation cut by 30%. He won't take any compensation until Ford's auto operations return to profitability.
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Reader Comments (Page 1 of 1)
2-26-2009 @ 11:03AM
delicia said...
I am so proud, 30% pay cut. I know it will be a struggle to live on that kind of money, but maybe if Ford would produce Cars that don't catch fire all the time, people would want to buy them. Put the savings into better engineering , design, and paying the families back all the loyal consumers that houses burned down, cars burned up, and peoples families who burned to death, over a defective product.