Autoblog

Barely over a year ago, Ford paid out cash bonuses to its employees and recently hinted that they'd do the same this year. Today, an email sent to Ford employees confirmed the bonuses, which will be $1,000 for hourly UAW workers, with significantly larger bonuses based on pay grade going to salaried employees. Before Alan Mulally came to Dearborn, workers at Ford would not have been eligible for any extra income, as the old bonus plan was based on a profit-sharing system. Profit is not something that Ford has seen in a while, losing some $2.7 billion last year.

According to Mulally, the number three automaker in the U.S. "made significant progress on our plan transform Ford Motor Co. into a lean global enterprise poised to become profitable again in 2009." To recognize the efforts of each employee towards the larger goal of regaining profitability, Ford workers should expect their bonuses on March 13.

Not all news was good for Blue Oval employees, though, as salaried workers were informed that their merit pay increases would be delayed from the first of April to the first of June due to the poor overall economy. Considering the state in which Ford is currently operating, we wouldn't expect too many hurt feelings by the slight delay.

[Source: Detroit News]

Ford is making significant strides to turn its North American operations around. In 2006, it was able to cut almost 34,000 workers from its payroll after one round of buyouts and is looking to cut even more of its workforce this year through another payoff program that's being offered to 54,000 UAW-represented workers.

While it's mortgaged everything in its arsenal to keep afloat through the tough times, FoMoCo is planning to hand out bonuses this year, as it did last March.

According to the Freep, the bonus plan is sitting on the table in front of Ford's Board of Directors, awaiting approval and it will likely cover some 23,700 salaried and 64,000 hourly workers in North America. Most salaried employees walked home with somewhere between $300 and $800 last year, with higher-ups paid "several thousand dollars to $15,000 or more."

While we understand that keeping moral high in these troubling times is important, with Ford posting a net loss of $2.7 billion last year, it seems that the major "bonus" for workers is that they are still employed at the Blue Oval.

[Sources: Detroit Free Press, Reuters]

While comparing Porsche to General Motors is beyond a stretch, we couldn't help but think about last week's UAW strike against the General while reading about Porsche giving away $7,350 in bonuses to over 8,000 full-time employees. Must be nice to be part of a profitable automaker – even if it's from sales of the Cayenne.

The automaker hailing from Stuttgart sold 97,515 cars during its fiscal year, ending on July 31. Those sales rose over the same period by 3.4-percent, bringing total income to $10.5 billion for the year. When the accountants finally get done doing the math, it's expected that Porsche will make a pretax profit that's considerably more than the approximately $3 billion it made last year. Good news for everyone involved, and it's certainly nice to see an automaker passing along the profits to its workers.

[Source: IHT]

Podcast #60 finds us reminiscing about the Geneva Motor Show. We spend a while talking about what our team saw at the show - standout vehicles, best and worst, most surprising (good and bad) to see in person versus pictures. John presses Damon for information about how some hotly anticipated cars such as the Mazda2, Audi S5, and the M3 looked at our first opportunity to be up close and personal with them. A good long time is spent covering Geneva before we turn our attention to Ford's sale of Aston Martin. Debate ensues over the move and whether it was a smart one for Ford. Speaking of smart moves and Ford, the bonuses that Alan Mulally breathlessly memo'd Ford employess drew some of our ire, as well as some of our ennui. We'll see how it shakes out, but perhaps the workers would have rather seen their paltry share go back into unbeatable product. We wrap up by alighting on all the doings over at Cadillac. The BLS wagon has just dropped, and there are rumors of a CTS Coupe and Wagon to really give BMW a run for its money. Of course, the sordid affair of the on again, off again $100K plus Caddy (and we don't me an XLR-V) elbows its way into the conversation before we trot off into the sunset. Enjoy!

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Ford announced today that it will be cracking open the coffers to pay out a bonus to every single one of its salaried and hourly workers in the U.S. and Canada, a number that now stands between 120,000 and 128,000 people. According to Automotive News, the bonuses will range from $300 to $800 for nonmanagers, while management will get a little more (isn't that always the way?). Ford has stated the bonuses are meant to boost morale and recognize the hard work of the entire Ford family to reduce costs, improve quality and pair down the ranks.

The one question that has to be asked is where or not Ford can really afford this right now. If we were to assume the least expensive scenario of the automaker paying 120,000 workers a $300 bonus, the tally would come to $36 million. That's the least expensive scenario, which is a gross underestimate since there could be up to 128,000 eligible for the bonuses that range up to $800 and even more for managers. Morale is certainly important, don't get us wrong, but perhaps such a large payout during these tough times will actually shake the morale of those workers left who believe their leaders aren't making the right decisions. It's something to think about.

[Source: Automotive News]

Alan Mulally went to Ford to kick ass and chew bubblegum, and now he'll be able to afford more Hubba Bubba. It's really a stock option bump -- from $5 to $6 million -- as a reward for taking FoMoCo by its earlobes and attempting to drag it out of the mire it's stuck in. We have seen more focus out of Dearborn as Mulally rallies the troops, and the compensation is recognition that the good fight is being waged. Intent on keeping its four-star general focused, the board has also allowed Mulally's immediate family and guests access to Ford aircraft for personal use, even without the presence of the CEO. While it may seem egregious – it makes sense. Rather than chaperone people around, Mulally's time is better spent running Ford. Also, since his family hasn't completed a relocation from Seattle, it allows them to get together with a less heroic effort. Even CEOs want to see their spouses and children, so while there are hefty expenses associated with flying the corporate jets around, a distracted, ineffective CEO is far more costly.

[Source: autonews - Sub Req'd]

The UAW has been hearing a lot about how the 2007 labor talks will involve tough concessions. Ballooning health care costs and twice as many retirees as active employees result in a $1,500 per-vehicle disadvantage for the Detroit automakers -- these are among the major factors cited for GM's $10.6 BLN loss in 2005 and Ford's $12.7 BLN loss in 2006. Of course, the UAW will point out that poor management decisions and a lack of new products are every bit as much to blame, which is why recent reports of Ford management bonuses are really hitting home.

This sounds a lot like when Delphi asked a judge to allow the troubled supplier the right to reward management for progress made in bankruptcy proceedings. As that was happening, Delphi CEO Steve Miller told the press that the company would cut line worker pay to as low as $9 per hour to stay competitive. It's a tough situation for both Ford and the union, since Ford needs to retain talent and keep some consistency at the top while the union tries to brace the rank and file for concessions in 2007. Even though Ford does need to hang onto its best employees, it seems like a bad idea to announce possible bonuses on the eve of the worst earnings report in its history. Ford will not decide until March whether to give out the bonuses.

[Source: Detroit News]