Ford Defers Payment for Top Executives to Cope With Coronavirus

Matt Posky
by Matt Posky
ford defers payment for top executives to cope with coronavirus

While Ford Motor Co. plans to reopen several factories by early April, it’s not doing much of anything at present. That’s a standard problem among domestic brands with the coronavirus afoot, and two of them — Ford and General Motors — are coming off sizable restructuring efforts that included staffing reductions in the thousands. Additional cutbacks aren’t desirable; not with everyone watching how these companies handle the outbreak.

As it secures extra spending power from credit lines, Ford knows the steep financial cost of having the majority of its workforce stuck at home (to say nothing of its customers) will be steep. A plan is now afoot to keep jobs secure.

With plants idle, the company has shown its usefulness by pivoting towards the production of medical supplies, including ventilators, with partners General Electric and 3M. A recent filing with the Securities and Exchange Commission, however, reveals Ford’s top-level executives are deferring their salaries to help the business hold on to a little more cash during this rough patch.

The document, first shared by Automotive News, stipulates that a percentage of most executive officers’ base salary will be deferred for at least five months. The accumulated deferred salary amounts will be paid after the Company has repaid at least $7 billion of its debt. Chairman Bill Ford will see 100 percent of his pay pushed back (don’t worry, he’s very rich) while other executives see half their pay delayed.

That includes CEO Jim Hackett, who issued a letter to Ford employees explaining that the firm does not want to cut staff unless it has to. He said the automaker will need all hands on deck after the virus recedes to help make up lost production time. Unspecified “tougher actions” may be necessary if the industrial shutdown takes longer than presumed, he added. For now, Hackett says Ford just wants to ease the company’s burden from the top down — noting that around 300 executives would see salary deferments of between 25 and 50 percent, starting in May. Ford is also freezing hiring for all non-critical positions, delaying merit-based salary increases, and suspending overtime.

Not wanting to ignore health concerns, Hackett said Ford employees that cannot work from home due to the nature of their work could see their payment and schedules tailored. Some may even be offered voluntary sabbaticals. Minimizing the spread of COVID-19 is essential, as no factory wants to be shut down a second time due to a surprise outbreak. Ford said it will continue offering employees infected with the virus paid time off to cover the mandatory 14-day quarantine period.

[Image: Ford Motor Co.]

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  • Michael S6 Michael S6 on Mar 26, 2020

    Deferred ? given Ford's abysmal pre epidemic performance they should be taking a pay cut.

  • ToolGuy ToolGuy on Mar 27, 2020

    "noting that around 300 executives would see salary deferments of between 25 and 50 percent" This could be a hit to Lincoln. What's the hot vehicle for executive family members these days?

  • Wjtinfwb How does the ICE mid-engine C8 platform work for... anything else? A sedan? SUV? With a mid engine configuration? A mid-engine SUV will have to be Suburban sized to offer the utility of a CRV. GM should dust off the Omega platform designed for the Cadillac CT6 for an SUV/Sedan offering with exceptional handling, Rear or AWD capability and acceptable space utilization. They also need to focus on interior fit & finish, trim choices and high quality final engineering and assembly. What GM doesn't need is another half-baked product with a storied and prestigious badge on the decklid and a premium price on the Monroney. No more Cimarron's, Allante's or X-cars needed to tarnish the reputation of Corvette.
  • InCogKneeToe BUILD It and they will come.By Build It, I mean a Vehicle that the Customer Wants and it works for them. It could be called Chevette for all that that matters. The Mach E's success isn't because it totes the Mustang on it.Just build what people want, the next Caravan/Taurus/Beetle/Maverick (truck).
  • YellowDuck Wait...how do you make a mid-engine crossover? Or even a 4-door coupe? Me not get.
  • 28-Cars-Later Thanks Corey. The head stud job on NOrthSTAR-T was $3K *years ago* as it involves an engine pull so rear wheel arch rust in and of itself isn't a show stopper. I'll be sure to check out the trunk as it may start to add up on deferred maintenance. Supposedly this was garaged so the underneath the rockers etc. should be decent but if those are shot its not gonna work.
  • Mark 2016 Hyundai Sonata Hybrid, G4NG engine with connecting rod bearing issues. Engine needs to be replaced, but Hyundai is denying warranty claim. I have all maintenance records from mile zero. It has been in Hyundai Service department 5 time in 4 months. They added the knock sensor and software update to let you know the engine is about to blow up. They kicked the can down the road doing patch work until the car was past the 120k extended extended warranty. I have that documentation too. So how can I join the class action law suit or find a Lawyer that handles these types of issues?
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