By on April 1, 2020

ford

It would be great if pandemics arrived with clear time frames in tow. Alas, this is not the way nature works. And for companies dependent on workers, um, working, the unpredictability of a viral outbreak means every cost-saving measure is on the table.

At Ford, which has already announced a hiring freeze and executive pay cuts, existing efforts might not be enough to stabilize its balance sheet.

As reported by Automotive News, Ford CEO Jim Hackett, speaking on Detroit radio station WWJ Tuesday, said rotating furloughs of salaried employees might need to happen if the current production shutdowns persist into early May.

“Using furloughs is a smart way where you can dial down some of the compensation. It’s painful, but the jobs aren’t in question,” Hackett said. “And then, as we get through it, you dial up the pay.”

The CEO said he prefers a rotating plan (one week off, without pay, after every three weeks worked) over a broad white-collar pay cut.

Last week, rival General Motors outlined a deferred income arrangement for its global salaried workforce. At the same time, Ford, currently scrambling to produce face masks and ventilators with the help of healthcare industry partners, announced the planned resumption of production at certain U.S. assembly plants. Heavy on trucks, the “key” plants were said to come back online April 14th.

That all changed Tuesday, when the automaker slammed the brakes on its plan. Against a backdrop of new warnings and extended social distancing measures broadcast from the federal level, Ford said the plants would not resume production as scheduled “to help protect its workers.”

As before, the company said it will regularly assess the situation to determine if a return to work is safe.

Get the latest TTAC e-Newsletter!

Recommended

28 Comments on “Ford Eyes Furloughs As Coronavirus Shows No Signs of Early Exit...”


  • avatar
    SCE to AUX

    Cue the people who think (insert company name here) should continue paying workers a full wage until the bank account is empty and they close the doors.

    We’re reading about car mfrs here, but the small businesses which are the economy’s backbone have the same problems on a smaller scale. Many will fold.

    Everyone gets a bite of this [email protected]#$ sandwich.

  • avatar
    Detroit-X

    I saw a study 10 years ago where Big-3 salaried workers averaged $140k/year including benefits. They can cut a lot more than they have already announced. If most of them can’t live on $25-50K for a while, then they are probably incompetent at their jobs as well.

    • 0 avatar
      JimZ

      Wow.

    • 0 avatar
      SCE to AUX

      The definition of a rich man is that he has $1 more than you. Then all the rules change.

      What gives you the idea that an 80% cut in pay can be tolerated by a salaried worker? Do you think they’re just banking that money under normal circumstances?

    • 0 avatar
      jack4x

      Yeah cause everyone knows that an average means everyone makes the same, from the CEO right down. It also means that workers receive a check for their benefits, since its all part of the salary right? I’m sure all bills will also go down by 75% in this recession, right?

      Seriously, get a clue. Other than the most senior folks, engineers, marketing people, office workers, purchasing agents, etc are not pulling in $140K a year. It’s awfully easy for you to advocate for cutting other people’s pay.

      • 0 avatar
        JimZ

        the internet is full of “Dave Ramsey” types who believe the only way to live responsibly is to live in a 1 room shack, eating hardtack and water every day, buying a $500 used car you paid cash for, etc etc. etc. and save/invest every last penny that isn’t needed to support the bare minimum to keep you breathing.

        ‘course, these folks always have their own “frivolous” purchases they handwave away with lame excuses.

        • 0 avatar
          jack4x

          Actually, hardtack and water is a pretty good analogy for Dave Ramsey’s advice.

          It may save your life if you’re starving to death/facing financial ruin, but no sane person should be depending on it alone once they’re back in the real world.

        • 0 avatar
          Cactuar

          JimZ, I don’t think you understand what Dave Ramsey teaches.

          Have you seen his house?

    • 0 avatar
      FreedMike

      I’ve always thought that it’s unfair to toss “included benefits” in with salaries as Detroit-X has – typically that’s the employer’s share of things like health insurance or other employer-paid benefits. That’s all important stuff, but the employee can’t pay his mortgage with that money.

    • 0 avatar
      Art Vandelay

      “… If most of them can’t live on $25-50K…”

      True. And why why do you need any more than that as well? And do you drive at all? Why? The bus goes everywhere people like you need to go. And why do you need a house at all? A small apartment with a pull down bed and minimal space can be provided to meet your needs. Food…That can be rationed to you from your neighbors…according to their abilities to produce to you, according to your need.

      Sounds good, eh Comrade?

      • 0 avatar
        krhodes1

        Not to be a jerk on the internet, but I don’t really live that much differently than when I made $50K a year, other than I have much nicer cars in the garage and a LOT more money in the bank. I bought a second home, but the tax savings of it being in FL effectively pay for it about 110%. Still have roommates up north.

        I took a salary haircut today (everyone in the company did, ~100 employees), hopefully temporarily but it doesn’t matter because I actually do live WAY below my means. In fact, I volunteered to my COO when he called with the news that if it came to it, I would be willing to go part time (and with no travel I have sweet f’all to do) if it meant that someone with kids could keep making closer to their full pay if this drags on and on (they are hoping for a decent amount of government support). I am privileged enough to be able to afford that, many, many people are not that lucky. I trust the owners (it’s a partnership) to do the right thing.

        Reality is too many people do live beyond their real means for various reasons, even when they make six figures. People’s spending does have a nasty tendency to increase with their income. The current crisis has cured me of one bad habit, at least temporarily – I ate out WAAAY too much. Just not eating out is probably going to make up for a decent amount of my salary cut.

        • 0 avatar
          FreedMike

          Hope it works out, krhodes…I’m in the mortgage industry – my company reviews previously originated loans, and originations are down, so the downturn wave hasn’t really hit us yet, but that check is definitely in the mail.

          I don’t really have to worry about layoffs per se with my company – if there is no work, they just put us on an “involuntary time off” situation until work comes in. Typically, in the past, that’s translated into half-days off, stuff like that. People with more seniority and experience get first crack at the new business, so I’m better positioned than a lot of the newer employees. We’ll see.

          But so far, so good. Fingers crossed.

          (Side note: if you were ever thinking about doing a refi, this would be a REAL good time to pull the trigger. Lord knows there are companies out there that would love the business.)

    • 0 avatar
      Detroit-X

      Oh my the umbrage of suggesting fiscal responsibility with high salaries, and saving for a rainy day. Well, it’s pouring now, isn’t it?

      Back in 2009, I sat at a restaurant table where salaried employees of GM were lamenting how rough things were in the Great Recession, and ordering rounds of $7.95 margaritas.

      One simple example.

      • 0 avatar
        FreedMike

        Oh, give me a break…how do you know what those laid-off workers’ financial situation was? For all you know, they all had a million in savings. As long as they’re paying their bills, why is their choice of cocktails any of your business?

        As far as those “overpaid” folks at Ford go, how the f**k did they know there would be a worldwide health crisis coming down the pike? They might as well be saving for that bad, bad day when a comet hits the planet, or Putin pushes the button.

        Easy to make financial judgments about other people… I’d politely suggest some lightening up is in order.

      • 0 avatar
        Art Vandelay

        And? I saw dudes in Baghdad feeding their children out of a garbage dump. Perhaps you are equally overpaid and could use a haircut? Or is it that you have determined that your level is the sensible way to live. Let me guess…If they make more, they are milking the system and don’t deserve it and if they make less than you they are obviously lazy and need to work harder. Do tell, what should be the cutoff here? Then tell me where you are. Bet they are remarkably close.

      • 0 avatar
        JimZ

        “Back in 2009, I sat at a restaurant table where salaried employees of GM were lamenting how rough things were in the Great Recession, and ordering rounds of $7.95 margaritas.”

        like hell you did.

      • 0 avatar
        Art Vandelay

        You are as full of $#!+ as a Christmas Turkey. You didn’t see d!ck.

  • avatar
    redgolf

    Detroit-X – exactly my thought, the most I ever made in the auto industry was $70K with a lot of overtime, $60K base wage, retired now making under $40K with a small pension ( thank you UAW) a lot more than my non union friends who didn’t want to bust their a__ in a factory!

    • 0 avatar
      JimZ

      the most my grandfather ever made in the coal mines was about $2,000/yr. So what are YOU complaining about?

      • 0 avatar
        redgolf

        Who’s complaining, not me, I’m just stating a fact that I was well taken care of through the years I worked in the auto Industry ( 40 ) and after I retired even though I’m not getting a full pension money wise I’m getting more than those that do not get a pension, also if people just lived within their means when they loose their big dollar jobs or in this case a cut in pay, they also loose their big house, boats, vacations, etc. unless of course they saved which few do, like in the Great recession! “Your Grandfather was paid what they offered for the time as most died early of black lung and working for low wages and benefits, I feel sorry for all of them, that’s big business for ya!

        • 0 avatar
          jack4x

          Yes because every salaried “management” employee is a fat cat with a vacation home and a big boat. Give me a break, 90+% of them are middle class with rent or a mortgage, car payment, kids in school, etc.

          It’s awfully easy for someone with a pension to criticize other people for not saving enough to last indefinitely on a furlough.

  • avatar
    Arthur Dailey

    Many live pay cheque to pay cheque. Among the middle class many may have a couple of months worth of savings.

    We can exist on our savings, but it will seriously impact my retirement income. And I surely do not wish to case in any of our investments with the current stock market prices.

    The ‘very rich’ who are sitting on stacks of cash are going to make out like bandits. For example real estate sales/prices are in a pronounced downturn. Or they can buy up cheap stocks/ETFs and wait for the turnaround.

    In Canada the government has announced a $2k per month ‘benefit’ for most workers who have lost their jobs due to the pandemic. Unfortunately we have 3 in our family and none are currently eligible, for one reason or another. Just bad luck on our part.

    That $2k should help most to survive. A Guaranteed Annual Income program would still be preferable, and less costly to administer.

    • 0 avatar

      The only time I lived from pay check to pay check was after collapse of Soviet Union and I was lucky to have good paying job – about $10 a month. All my savings (rain day) were amount to about $50 kept in USD bills in suitcase. When I came to US I had enough money (about $3500) to survive 2 or 3 months after I bought a junk car and necessities. But I survived.

  • avatar
    krhodes1

    This is… fine. But for $15K there are about a million much nicer used cars I would rather have. Though I also assume no own has ever paid MSRP for one of these.

  • avatar
    Superdessucke

    Subaru CFO Toshiaki Okada said in February that “it’s impossible to manufacture cars without China.”

    LOL! Sounds like he’s going to need to make the impossible possible to keep selling cars. Boo hoo.

  • avatar
    schmitt trigger

    Speaking of average salaries, some salaries are more average than others.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • slavuta: All you specialists completely miss the point. Mazda3 used to sell 5 2L cars to 1 2.5L. They removed small...
  • Crashdaddy430: The design is starting to really grow on me. In addition to the LC500 this is the best looking Lexus...
  • 285exp: If the nag screen made you agree to waive your right to sue the manufacturer in case of an accident before...
  • jetcal: Haven’t seen one in years. I actually looked at the SER, the kicker was the dealers marking ’em...
  • DrivingEnthusiast.net: That’s exactly it: decent suspension, symmetrical AWD, 6-speed manual, and another...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Matthew Guy
  • Timothy Cain
  • Adam Tonge
  • Bozi Tatarevic
  • Chris Tonn
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber