By on February 25, 2009

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.

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20 Comments on “Alan Mulally, Bill Ford Take Pay Cut For UAW Concessions...”


  • avatar
    McDoughnut

    They had to negotiate Direct Deposit…..?

  • avatar
    dgduris

    Sure they had to negotiate that: spouses can be a dangerous thing with direct deposit and a check card.

  • avatar
    mikey

    So a guy on the line gets 2 ten minute breaks and 20 mins for lunch.No COLA, senoirity SUB,Xmas bonus gone no job banks and more.Its liveable but I hardly call it no concessions.What about VEBA?they trade it for Ford shares?Now thats what I might call a concession.

  • avatar
    rcguy

    Except for the loss of X-mas bonus’ this is the same as last years Canadian contract.

  • avatar
    boosterseat

    Good on them for correcting the pay and bonuses for serior staff, although its 2 years too late. BUT – Ford lost billions in 2008 and these guys are wasting time with this fluff with the unions.
    It is obvious, yet again, that nobody in Detroit gets it yet. If Ford thinks this counts for anything, I consider them toast. They are bleeding a nearly uncountable amount of cash daily. Come on Alan, right the ship for christ’s sake.

  • avatar
    protmind

    So all the union is giving up is a COLA? At my firm, we had layoffs and pay cuts for the remaining staff.

  • avatar
    jfsvo

    “Come on Alan, right the ship for christ’s sake.”

    Yes Alan, wave your magic wand and fix this already. Quit wasting time on stuff that will actually save the company money in the short and long term.

  • avatar
    mkII

    Hi guys, I’m a newcomer here so I’d appreciate if some best and brightest would correct me:

    1. The economy is what Detroit 3 is blaming mostly, so naturally its safe to assume the cost of living will go down for the forthcoming few years. Thus deleting COLA (cost of living ADJUSTMENT) seems to mean “no cuts” (downward adjustment) more than “no raise” to me.

    2. Ford is plagued with overproduction, full stop. Having limited break time and one (out of a year) less holiday will mean more workers are on staff producing vehicles that Ford has nobody to sell, and nowhere to store.

    That does not sound/smell/feel like a sane concession.

  • avatar
    TVC15

    Easter Monday vacation??

    Oh man, that’s rich.

  • avatar
    dgduris

    @mkII,

    Costs WILL go down, until the loans B Obama et. al, have taken out for the “stimulus bill” are due, the dollar becomes worthless and hyper-inflation ensues.

    I imagine that the COLA being “suspended” allows for COLA reinstatement when said hyper-inflation comes to pass.

    Another win for Gettlefinger (Bond theme plays).

    Pushing the union to a walk-out – RIGHT-NOW – would help correct the current inventory issue for the B3, me thinks.

  • avatar
    Bunter1

    Considering that Mullaly is the one person in Debtroit that can’t be blamed for the mess, and was hired to try and fix it-ANY concession from him is VERY generous.

    He had a great position when they came to him, he didn’t need this.

    Doubt the rank and file will appreciate that however.

    Bunter

  • avatar
    jkross22

    Interesting that performance bonuses for entry level folks will be suspended. It’s likely those bonuses didn’t amount to much considering they’re entry level. Moreover, what do you do when you have a star performer in an entry level job and can’t bump them with a bonus? Tell them that if they weren’t entry level that they’d get the bonus?

    Easter Monday vacation??? What a load of crap.

    JOBS BANK still exists albeit in a modified form to avoid embarrassment and to show some window dressing has been applied.

    Nothing to see here…. move along….

  • avatar
    HarveyBirdman

    It still sounds better than what 99% of the private sector is getting these days, and I’m not limiting that statement to just blue-collar jobs. I can only imagine how flush the benefits must have been back in Detroit’s heyday. Wow.

  • avatar
    Runfromcheney

    How the hell can Bill Ford Jr take a paycut? He has already been paid nothing for the past few years! What are they going to do, take away his lunch voucher?

    That aside, props to the Ford BOD for taking paycuts. This will hopefully show the world that Ford is really trying to turnaround, and that Wagoner and his men are full of shit. (Like we have known for the past 10 years).

  • avatar
    esg

    Same old, same old. Gettelfinger continues to screw management short-term. Long-term this will kill Ford. Concessions means pay cuts and health benefits cuts. All of the rest is BS cutting.

    Shame on Gettelfinger. These production workers still make a wonderful living.

  • avatar
    John Horner

    “They had to negotiate Direct Deposit…..?”

    The company negotiated for mandatory direct deposit. Some people like getting a physical paycheck to do with as they please.

    “How the hell can Bill Ford Jr take a paycut? He has already been paid nothing for the past few years! What are they going to do, take away his lunch voucher?”

    His pay is being deferred. That means it is in theory building up in an account and will be paid out to him at some later time when the company is making money again.

    The most recent Ford Annual Report was released in April 2008 and covered the prior fiscal year. You can see why the UAW may have had trouble accepting that the company was poor when you look at the compensation highlights for the top five earners:

    Alan Mulally, CEO, Total 2007 compensation $21,670,674

    Don Leclair, CFO, Total 2007 compensation $11,703,127.

    Mark Fields, President – The Americas, Total 2007 compensation $8,389,898.

    Lewis Booth, Exec. VP – Ford of Europe and Premier Automotive Group, Total 2007 compensation $10,264,463.

    Mike Bannister, CEO, Ford Motor Credit, Total 2007 compensation $8,677,747.

  • avatar
    BB

    Shame on Gettelfinger. These production workers still make a wonderful living.

    Isn’t it this man’s job to ensure, to the best of his ability, that the above statement remains true? SHAME on YOU esg, for perpetuating the idea that the general public should be against the middle class worker! What does this country have to offer if it no longer produces anything? If we continue to consume more than we produce what will most certainly take place? The American People must take a stand on this “Race to the bottom” step of the agenda to redistribute the world’s wealth!

  • avatar
    mzam

    Its a shame that many of you are taken in by the negative spin the media portrays on unions. If not for unions (including UAW) there would be no middle class. In fact, as we see the decline of the unions in this country, we see the shrinking of the middle class. If we don’t defend our rights now, we will soon be back to the “Vanderbilt” era of rich and very, very poor!

    There is nothing wrong with making concessions in this time of reorganization; we need to make certain that when we make concessions, we have in writing and we are made “whole” again when prosperity returns. Believe me when I say, when the ship is righted, the CEOs will get their millions (more likely billions)! And if not in writing, what you sacrifice today will be gone forever. Not only for the union personnel, but for all the non-union workers as well. Remember, companies only gave benefits to attract workers because “union” shops had them. When the unions are gone, surrounding companies will again give nothing.

    We are at a monumental time in history and we need to take action, not for greed (which the media likes to insinuate), but for our rights as the foundation of every company we work for. We need a revolution! We need to organize unions like never before in history! We need to have rights, in writing, that protect us when prosperity returns. We don’t need unrealistic, material demands. What we need are the demands that we are willing to suffer now for the greater good of a future with the written understanding that when the rich get richer again – WE SHARE THE WEALTH WE CREATED!!!

    Don’t be taken in by the false claims the media projects about unions. Remember who owns the media – THE RICH. If they break the union spirit they garnish total control. They use the employees (and lets understand that the employees are the companies not the buildings they work in) as slaves to line their pockets. We, as workers, make them rich. We are only asking for a comfortable living. In the average American UNION working establishment, the CEO makes over 800 times the average worker’s wage. These are the workers the media claims are “overpaid and greedy.” Yet, even at their suggested inflated wage, the CEO is making 800 times that wage. So, if we deflate the wage the CEO will increase his wage and the difference in pay is exponential. Who is truly the greedy? I only propose balance.

  • avatar
    McDoughnut

    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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