Automotive News [sub] reports that Ford CEO Alan Mulally and Executive Chairman Bill Ford will take a 30 percent pay cut as part of a package of management cutbacks aimed at easing passage of a recent Ford-UAW agreement. Additionally, Bill Ford’s entire compensation package will be “set aside” until the company returns to profitability and the Board will forgo all cash compensation this year. Finally, 2009 performance bonuses for global salaried employees and senior executives have been canceled. Read Bill Ford and Alan Mulally’s memo to Ford employees at the Detroit Free Press. And what of those UAW concessions? A UAW memo on the Ford agreement is also up at the Freep (PDF), and it includes the jaunty assurance that “there is no loss in your base hourly pay, no reduction in your health care and no reduction in your pension.” So what are the concessions?
Cost of living adjustments (COLA) have been suspended, break time has been limited to 40 minutes per eight hour shift and 50 minutes per 10 hour shift, direct deposit will become standard, performance bonuses will be suspended for entry-level workers and Christmas bonuses will be suspended for all. The Easter Monday vacation day has been suspended for the remainder of the contract.
Also, the Job Security Program (Jobs Bank) has been modified to eliminate “Protected Status” for workers. All employees in protected status will be placed on layoff. But, Supplemental Unemployment Benefit (SUB) and Transitional Assistance Program (TAP) benefits remain in place with some modification. TAP will pay half of a worker’s base wage for as little as 26 weeks and up to 52 weeks, based on seniority. SUB will continue to provide the same health care benefits to laid off UAW members as before, with a revised seniority schedule. Workers with less than one year of experience will get no SUB benefits, while workers with 10 years or more experience are eligible for 24 months of SUB health care.