Ford Eyes Furloughs As Coronavirus Shows No Signs of Early Exit
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.
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