Filed under: Ford, Earnings/Financials
Performance-based pay raises coming back to Ford
Cost-of-living pay increases are nice and all, but after you've invested your heart and soul in a job well done and have performance metrics to prove it, a merit increase should be expected, as well. Salaried employees for Ford haven't seen a merit-based increase in pay since last year. Regardless of how well they performed their jobs, the Blue Oval just didn't have enough money to invest back into its workforce. While Ford claims it's hasn't "completely turned the corner", it's doing well enough that merit-based pay increases are being reinstated this April. According to The Detroit News, Ford is setting aside 2.7% of its total U.S. payroll for salaried workers so that it can dish out raises based on how well each employee has performed. Managers will get an automatic half percent pay increase, and bonuses will also be doled out. There's a catch, though. Salaried employees will also be asked to be pay 24% more for their health insurance next year, an amount that breaks down to be between $20 and $25 per month, which TDN reports is more than the merit increase for most workers will cover. For their sake, hopefully Ford will turn the corner soon so these people can get paid.
[Source: The Detroit News]
Reader Comments (Page 1 of 1)
cowboy bob 2:24PM (12/15/2007)
Oh come on. When Nixon did wage and price controls in the "72 recession I didn't get ANY raise for 37 months. After that 2% ove the next 18 months. Plus I wasn't making automotive employment wages. Cry me a river.......
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cowboy bob 2:26PM (12/15/2007)
opps, '81. Well, I am old....
Mike 4:11PM (12/15/2007)
These are the salaried employees, not the union hourly employees.
Not sure what the average salaried employee makes, but seeing as you need a bachelors degree with a minimum 3.0 GPA to get into Ford (at least in the last 10 years), I'm thinking they started at competative pay for a college grad and got subsequent increases most years based on performance.
Since then, 1/3 of their collegues left or were shown the door and they had to pick up the slack. They are working for a company that is trying to pull itself from the brink and job security is almost non-existent for them right now, I imagine moral is hurt too. They've made huge steps to improve their product with less people to do the work (you don't need less engineers because you assemble less cars).
We also live in very different times than we did in '82 or '72, single income families have a much harder time than they did back then just to make ends meet. So they got nothing last year, healthcare costs increased, cost of living increased, and they're looking at an average of less than 3% increase with a modest (probably below $1000 for a non-management employee) bonus and you think they're living the good life....... I seriously doubt it.
Elliott 11:16AM (12/16/2007)
Trying to make a comparison between the past and present when it comes to a business being competitive shows just how little you understand the situation.
Gone are the big pensions, in are 401Ks. Gone is great health coverage, in is paying $400/mth for insurance. You can't walk onto a college campus and talk to prospects and tell them you want them to move to Detroit and expect 1970-1980's style compensation. They'll laugh at you and send their resume to Toyota, or any other Fortune 500 company that offers merit pay increases.
When it comes to 2007, "automotive employment wages" for Engineers, accountants, buyers, and other salaried positions are average when compared to other industires.
cowboy bob 2:27PM (12/15/2007)
Come to think of it, '72 was no picnic either!
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fm 2:57PM (12/15/2007)
I wonder how much the executives are getting in bonuses and raises for this end of year.
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RicardoHead 3:48PM (12/15/2007)
If you sink your heart and soul into any job in a big corporation and do it well, you'll quickly learn that the guy in the next cube who skated by, surfed the net all day, and golfed with the VP will get promoted before you do, and that your job is only slightly less at risk come RIF time in late December.
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cowboy bob 4:47PM (12/15/2007)
Couldn't have said it better myself Ricardonoggon. Mike must be one of the Ford guys on the back nine with his boss.......
Big Rocket 2:13PM (12/16/2007)
cowboy bob: You were living in the past (per statement @ Dec 15th 2007 2:24PM), Mike politely pointed out the realities of today (per statement @ Dec 15th 2007 4:11PM), and now you're insinuating he's an ass-kisser (per statement @ Dec 15th 2007 4:47PM)? Shame on you.
cowboy bob 3:18PM (12/16/2007)
Well Rocket, and Elliot, I got out of 4 yrs of college in 1966. I went to work as a mechanical engineer for my first job with a major player in the defence industry. No experience, green as grass. My starting salary was $2.80 per hr. That, based on a 40 hr. work week was $5800+ per year. A brand new HIGH PERFORMANCE 427 Corvette was $5800.00. I know because I bought one. That was a years starting salary for a kid fresh out of school. (ME). Now, a new ZO-6 is $68000.00. Isn't this about the same ratio, or do kids fresh out of college at Ford start much higher? I have been around a long time, seen plenty, DID plenty, and I think that may make me understand a little more than you kids think. I enjoy a comfortable retirement from money invested thru many years. My father gave me a $5.00 bill in an envelope when I graduated high school, and not another dime to this day. I paid my own way, ALL the way. I just might know a little more than you think. I would like to see how smart you boys think you are in thirty/fourty years.
Big Rocket 4:24PM (12/16/2007)
cowboy bob: None of your experience would justify what you had done, baselessly insinuating someone else is an ass-kisser. And given your age level, you show a high level of immaturity for your name-calling, referring to others as kids or boys. Being presumably older than the rest of us, one would think you, of all people, should know how to behave yourself.
Mike 10:10PM (12/16/2007)
Bob,
Are you reading the same comments that we all wrote?
I simply stated that Ford pays a similar starting wage as other companies looking for engineers and the like out of college. My point is they don't make more than their classmates from college working in other companies or industries.
For your information, I have been an ME for about 10 years now, I graduated from a big 10 school and I can tell you that the average starting salary for a big 10 ME is not $68k. It is lower, that includes Ford. That also includes the fact that health care is more and more on the employee's dime, retirement is more and more on the employee's dime, and per your example, products are more expensive today. Plus there are more things today that cost money than 30 years ago. Cell phones, high speed internet, cable tv, etc. didn't exist back then, and while not necessary, are very common to the average middle class existence these days. This, thereby proves my point that today's wages aren't as good as they were 30+ years ago and you have to stretch further on a single income.
Therefore, your comment of distain for those who make less to start than you did with the same degree is, in my opinion, unwarranted. I only offered that I wouldn't want to be in their shoes with workload, moral, or lack of COL increases last year and that a simple COL this year isn't going to make any of them rich.
Oh yeah, and just for the record, not all of us were given a free ride through school or after, myself included so your unbased comments on that are also unnecessary.
Elliott 1:59AM (12/17/2007)
Hahaha. Oh Cowboy Bob, you do not want to play the "My Daddy didn't give me a dime" game with me. I win that one, always.
I avoided insults and tried to explain that Ford is just being competitive and trying to attract the best talent they can for their turn around efforts. Your example with the Corvette shows that you have some grasp on the concept of inflation. Perhaps you are aware that inflation tends to average around 3% per year. Ford is compensating it's employees with a 2.7% MERIT-BASED pay raise.
So what's your deal? Are you some grumpy old man that gives his grandkids a dime for Christmas, because that was a lot of money in your day?
cowboy bob 1:10PM (12/17/2007)
You people simply don't get it. Things are no different today than 40 years ago. The names have changed is all. That was the example of salary/Corvette ratio from then to today. There has always been inflation. There will always be inflation. People used to work for a dollar a day, but a new suit was 12 bucks. What I hate is people crying about how much tougher they have it than my generation. Bullcrap. I used to think it was tougher for me than my father. He fought Germans in the trenches in France in WW1. His father rode a boat for 15 days to get here during the Irish potato famine. I worked just as hard as you youngsters, and just as hard as those before me. My first comment when this all started was "Oh come on, cry me a river". I havn't changed my mind.
Big Rocket 1:38PM (12/17/2007)
cowboy bob: You obviously led a tough life. But does that give you the right to make light of other people's misfortunes? You current behavior proves age and maturity do not go hand in hand.
roger 4:14PM (12/15/2007)
Yes big companies use you all up and then let you go when there done with you.
http://www.wealthandfreedompackage.com
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wwhit710 7:22PM (12/16/2007)
Unfortunately this article mis-quotes information from the Det News article. The Detroit News article states that the Merit more than covers the increased cost of the insurance...where in this article it claims that the cost of insurance is more than the merit increase.
But unfortunately, people in this comment thread don't seem to care about that, instead just how this who thing is about some "social injustice." All this over what is the only cost-of-living adjustment that Ford provides. 2.7% is rather small if you ask me, but it at least shows that there is an effort to continue to pay wages.
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Elliott 8:59PM (12/19/2007)
"What I hate is people crying about how much tougher they have it than my generation. Bullcrap."
I'm not saying things are easier or harder. I'm saying that things are different, and performance based raises are necessary if Ford (and Michigan as a whole) expect anyone with an education to stick around while they try to get their act together.
If you want to believe that your life is tougher, then fine. I won't argue. But saying those people don't deserve their raises or saying that people who ask for a raise are just "crying rivers" doesn't sound fair. In fact... it sounds like envy.
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