• Feb 25th 2009 at 10:29AM
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The day after Ford and the UAW reached a tentative retiree health care deal (General Motors and Chrysler are still negotiating), the leaders of the Dearborn, Michigan, automaker have announced that they will be taking a 30 percent reduction in salaries over the next two years. A memo, signed by Ford Executive Chairman William Ford Jr. and Chief Executive Alan Mulally, addresses the pay cuts and adds that Ford's board of directors will also drop their compensation for the same period of time. In addition, performance bonuses for salaried workers and senior executives will also disappear.

As reiterated in the memo, Ford and Mulally are not wavering from their plan to go without government assistance and these recent announcements support that strategy. "We know these are challenging times and we all are affected by the tough actions we are taking... However, these are necessary actions to help us emerge as an even stronger, profitably growing Ford Motor Company for the benefit of us all." Thanks for the tip Adam!

[Source: WSJ.com | Image: Bill Pugliano/Getty]

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    • 1 Second Ago
      • 6 Years Ago
      Performance bonuses are not a bad thing...EXCESSIVE performance bonuses are what chaps my a$$. Say, no more than 10-15% of base salary for bonus, and that includes stock options valued at par, not the artificially low value (for example priced at the lowest in the last 52 weeks or even worse backdated to a later-determined date that is financially advantageous).

      Pick a multiple of the average non-executive (read union or equivalent) pay of say 10-20, not the absolutely obscene 200-400 multiple that executive compensation has grown to since 1970.

      As if it's gonna happen.

      • 6 Years Ago
      KUDOS to Bill and Alan!!!! I do agree that it should be a bit deeper and last until Ford is back to profitability but it's a very good step in the right direction.

      My next vehicle will be a Ford. I've been wanting to get back into a domestic for a few years but this is even more reason to do so.

      Stumpy - Get a Volvo C30. Same platform as the Focus RS. That's one car I've been interested in lately.

      • 6 Years Ago
      They should get paid according to how they're doing their jobs...
      • 6 Years Ago
      They should take a $1 salary until Ford is profitable again. They've FAILED, they don't deserve a paycheck. Their insane bonuses alone pay them more than almost an entire plant of employees makes.
        • 6 Years Ago
        You are right, so should the management of TOYOTA, NISSAN, DAIMLER.... as they are all losing money as well. Basically the only manufacturer that is profitable right now is Honda based on their motorbike division. Ford has NOT failed. Wall St failed the US people and the world which put Ford and everyone else in this negative position. Ford was profitable in the first quarter of 2008 and they have not asked for outside assistance. They are launching some of the best products they have ever designed right now. They have equal quality as the Japanese, and they have BETTER fuel economy with their hybrids and trucks. Good job FORD!!
        • 6 Years Ago
        How exactly did Mulally fail?
        • 6 Years Ago
        Well said, blotto, well said. And I can tell you as a former Ford vendor, you're spot on.
        • 6 Years Ago
        Maybe they should have planned for the economic collapse and had a vehicle designed and in production that they could give away for free and still make a profit, and then feed to poor with 5 loaves and then walk on water. Then they would qualify for a full salary.
        • 6 Years Ago
        Ford as a company may have failed, but cut Bill Ford and Mullaly some slack. They didn't fail. They've inherited 30+ years of mismanagement by their predecessors.

        Ford tried to step in to fix things, and then stepped aside to bring in professional help in the form of Mullaly from Boeing.

        It's a dirty job, and someone has to do it. I wouldn't want to be in their shoes.
        • 6 Years Ago
        J.Crew, you're spot on as well. Wait until all the Toyota fans see what Akio Toyoda, Toyota's new incoming president, does to their favorite company. A Wall Street Journal article said the Toyoda family is calling into question everything Akio Toyoda's predecessor, Katsuaki Watanabe, including the system of kakushin, or "revolutionary change," which the Toyoda family wants abandon immediately. Their ripping on Watanabe's moves to make Toyota bigger internationally than GM, they're highly critical of how much manufacturing capacity they put in the USA, they announced their intention to improve Toyota's profitability by going back to "an image of sturdy affordability" and are "reining in its engineers, who have been designing new features that occasionally appear to be out of character with the company's utilitarian roots" and also reviewing all technological innovation used in the manufacturing process, because it's become too expensive.

        That means after Ford got ripped in 2005, for styling the Five Hundred to be too plain, and citing the new Camry as proof that even Toyota was becoming more stylish and more innovative, four to five years later, Toyota's founding family is going to push Toyota back to making appliances on wheels.

        You got to love it.
      • 6 Years Ago
      Everyone should do what Ford is doing. GM, Chrystler, small business, large business, and more importantly, the Federal and State govts should be SLASHING budgets and compensation for the CEOs to deal with this crisis. The President doesnt need a salary. He is a millionaire on his own. Getting a free house and personal protection should be enough. Same with Pelosivich and the rest of Congress. Very few govt officials deserve a paycheck right now, Democrat and Republican. If you are independently wealthy you shouldnt be taking a check. Nor should you be passing 1 trillion dollar 1 leg of the stool plans.
      • 6 Years Ago
      I really have to say that I'm sick and tired of hearing what great steps these car companies are taking to save money. Did anybody read that article last week with GM cost saving measures? Cutting out a few cafeteria's, removing batteries from the clocks, shutting lights off when employees leave etc etc.

      If these guys ran their businesses like business, they wouldn't be nearly this bad off (yes, everybody is hurting, but these guys just don't have a clue)

      I'm a run a small to medium sized business with 50 employees, started with one - - ME and now we exceeded sales of 4.5million, from hard work and watching the bottom line. My business trips don't include first class or business class tickets for flights . . policy is, if the flight is over 5 hours we are allowed to book business class, over wise you fly like everybody else. Business lunches, cars, weekend golf trips and all the trapping that go with corporate America are strictly moderated in our company and we rewards results with bonuses based on productivity and sales. In a 10 year history of our company, it was only last year I drew a salary over 60k to make it currently 100k

      Sorry for the rant, but these corporate big wigs just have been getting on my nerves and it seems like they are doing everybody a favor taking a pay cut. . . . yeah right.
        • 6 Years Ago
        Saving money is saving money. The city I live in and work for is switching all of it's stop lights over to LEDs. Doesn't sound like much but the city saves a buttload of money in the end (don't know a for sure figure). Turning off the lights and shutting off computer screens can possibly save these companies millions.

        You can't put 100% blame on the Big 3's current management. They inherited decades worth of disasters. And the whole economic meltdown hasn't helped. Sadly for them, the meltdown came at a very bad time.
        • 6 Years Ago
        Not to be a cynic but does it not behoove you to draw minimal salary as a small business owner and then make a majority of your purchases in the companies name and not your own. Thus you avoid income tax penalties and other tax implications.

        You must be either cost heavy company or fudging your income as stated above. I don't believe you are being selfless. A gross of 4.5M tells us nothing without cost. What was your income in relation to your net margin? You may not be selfless by drawing $60K in pay but rather hamstrung by the reality of your balance sheet or avoiding income tax.
      • 6 Years Ago
      ...and they didn't even have to wait for the man in the ivory tower to force it upon them.

      Way to go Alan and Bill. My next new car is going to be a Ford.
        • 6 Years Ago
        well said John.

        actions like these are what we need more of. enough of the finger pointing and making everyone else suffer the consequences of the terrible market. they are giving us a showing of good faith by making these choices. it's like they actually 'get it' ....

        short term pains for long term prosperity. Great job Ford.

      • 6 Years Ago
      They should take 100% pay cuts until every Ford no longer uses dual beam headlights.

        • 6 Years Ago
        Does it get boring to write the same thing on every Ford related post? Or do you have robots doing it for you now?

        But keep on fighting the good fight man... Someone has to tell everyone that the Europeans are better. Maybe one day Mullaly will read it and have the epiphany you long for.

        Of course, then you'll have to find another reason to not buy Fords.
        • 6 Years Ago
        you have sub-par comments MikeW... and i think they need to improve.

        • 6 Years Ago
        Sub-par products? There are a lot of people out there who would disagree with you.

        Anyways, like someone else said, say something new. You think the average consumer cares about what kind of headlamps Ford's vehicles use? Focus and Escape sales went up even without the use of quadbeams and amber turn signals. Heck, the almighty Toyota switched over to dual beams on the current Highlander.
        • 6 Years Ago
        Mike, let me get this straight... your bashing Ford because they arent using quad lights?? that is very sad kid. My 96 cavalier has quad headlights and when i turn the high beam on the short beam turns off. many cars also do this.Im waiting for the next guy to say i hate ford because they are not making HID available in every vehicle as an option
        • 6 Years Ago
        I would figure they would actually like a salary, so they would spend one week-cracking the whip and get quad beam headlights in the:
        F-150, F-superduty, Ranger, E-series (van), SportTrac, Flex, Explorer, Expedition, Escape, Focus, Mustang.

        What would spur Ford to do more than just the absolute minimum, amending FMVSS108?

        Lets not even talk about red turn signals

        No, lets not be critical and honest about the situation.
        Ford has sub-par products, they need to improve.

        • 6 Years Ago
        save it MikeW.

        posts like these are like nails on a chalkboard.

        embrace a piece of positive press coming out of our domestic OEM's. how in the world is this news story anything but GOOD news?
        i just dont get it. just dont post at all if its just going to be a non-sensical rant.

      • 6 Years Ago
      I think my next car will be a Ford too. Not just because of this, but because of their more responsible fiscal actions over the past few years.

      Listen and learn GM and Chrysler...
      • 6 Years Ago
      Way to go Ford! You guys have really impressed me! I think their just might be a Ford in my future :)
      • 6 Years Ago
      Lets she Bill and Alan give up their company car Perks heehee!
      Alan actually funneled huge amounts of money into a rainy day fund and was heavily critized for it.. yet that is exactly they are not relying on government bailouts right now...

      • 6 Years Ago
      Its about time. Why didn't they do this a year ago?
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