Alan Mulally, Bill Ford Take Pay Cut For UAW Concessions

by Edward Niedermeyer

Published: February 25th, 2009

alan mulally bill ford take pay cut for uaw concessions

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.

Edward Niedermeyer

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McDoughnut on Mar 05, 2009
Boy, where to begin with this one.... To keep the thread germain to automobiles I'll just point out one thing. You focus on pay and how non-union companies are 'forced' to pay union rates - because of a pleasant knock on effect of union wages at other companies. I think that it's a stretch to think that Honda in Tennessee or BMW in SC is competing for the same worker as is Chrysler in Michigan. So, the need to offer identical pay is nominal. Non Detroit companies could even offer noticeable less pay as they conceivable offer more job security. The big picture problem with your argument is that Big 2.8 union shops are inherently unproductive when benchmarked against the domesticated imports. They pay their workers comparable wages not because ChryCo, Ford or GM pays 2000 miles away - rather because they get more from their workers. Oh, and BTW the "Rich" media has never been so poor..... Just ask any NY or LA Times shareholder. Thanks Internet!

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Anonymous on Nov 02, 2009

[...] allowed Ford to avoid bankruptcy and government intervention. In addition Mulally also successfully negotiated with the UAW earlier this year, with pay cuts for senior [...]

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