When General Motors was on the verge of bankruptcy, cuts were made to salaried workers' pay and benefits. The move was important to help preserve as much cash as possible while also showing the federal government and the United Auto Workers that everybody in the company was making a sacrifice. Some might even say that salaried employees sacrificed more than others, as thousands were given pink slips and all lost health care benefits after age 65.
Ford and General Motors froze merit pay raises for white collar workers for one year, and as we reported last week, Ford is set to reinstate them next year. GM has just announced similar plans to bring back the merit-based raise for its salaried employees, as well. The raises will be paid starting next year, contingent on continued overall (global) rosiness in the business, but any increases will be "based on employee performance." The General, however, has also set up a merit fund from which to