Ford will be taking a conservative approach to 2010, according to Chairman Bill Ford, who tells Automotive News [sub] that unemployment makes him most pessimistic about the year to come.
We’re not planning for a huge pickup next year. If we get one, great, we’ll ride it. We’re planning conservatively. Just as we did this year, we’ve kept our inventories low. If things start to pop for the better, we’ll adjust our production upward and go that way
And why not? Ford’s stock price has soared over the last year, since falling under $2 a year ago. This despite the fact that the Blue Oval is mortgaged to the hilt and will miss profitability for 2009. But because Ford believes that, as President of the Americas Mark Fields puts it, “our plan is working,” the bonuses are coming back for Ford’s white-collar employees.
According to the Detroit News, tuition assistance, 401k matching and merit pay increases are all being reinstated for Ford’s white-collar employees. These perks were suspended over the last 18 months, as Ford turned record losses, and the Detroit-based auto industry plunged into turmoil. “We had committed to employees to reinstate them when business conditions allowed, and they have improved to the point that we can restore these benefits,” say Ford spokesfolks. Too bad the results in question amount to two quarters of operating profit in a year that will still end up in the loss column.
Meanwhile, the reinstated bonuses seem to vindicate the UAW rank-and-file rejection of proposed concessions to Ford. Sure, the UAW gave up its decades-long tradition of platform bargaining by refusing Ford parity with GM and Chrysler, but if things are good enough in Dearborn for mass reinstatement of perks, they’re probably good enough to reject no-strike clauses.
Ford seems to be taking a much more long-term approach than GM or C. If that’s the case, then restoring bonuses is justified. In any case, Big Brother doesn’t have anything to say about this plan, fortunately.
Ford can take a more long term approach than GM or C because they don’t have the short term obstacles to deal with the other two have. Our local news (metro Detroit) reported last night that GM had already restored these same items to its white collar workers.
You’d think they’d wait until they return to profitability before making such a decision, but I guess they need to do something to keep people upbeat and happy. Ford does seem to be making all the right decisions for now, and people seem to be supporting them for it, but eventually when people realize that their products still aren’t all up to par, what happens? Ford is still leveraged to Kingdom Come, and another bad year could spell disaster and send them running to Washington with their hands stretched out. Ford isn’t in the clear yet, we could be looking at another year or two with this recession, nobody is safe.
I disagree that Ford’s products aren’t up to par. According to various quality/owner satisfaction surveys Ford products rank right at the top in some cases surpassing Japanese brands. Personally, I am ending a three year Fusion lease and although I only put 11k miles on the car I never had to take it back once for any warranty repairs. I had my previous two vehicles both F-150’s for three years each and one had 30k miles on it, neither of those ever went back once for warranty repairs. It doesn’t get any better than that.
If Ford’s products were “up to par”…their sales would reflect it.
The Flex has missed the 100K mark Ford puut out by a wdie margin….the ancient Explorer is outselling it by 10K+ units.
The Fusion is FAR behind the Camry/Accord.
The Focus is WELL behind the Corolla/Civic.
The Edge/Mustang are having a horrid year.
Lincoln is in shambles….The MKTaurus has fallen by over 20% for the past FIVE months.
Mercury is a joke that has no support from Ford at all.
Z71, what you’re talking about is marketing and has absolutely nothing to do with the quality/owner satisfaction of Fords products. It is a fact that the domestic manufacturers all gave the car market away to the Japanese while they were cashing in on the full size truck and SUV market. The domestics may never again sell cars in the same numbers the Japanese do. Pointing out the sales of the Flex has nothing to do with the quality of the vehicle, only the market acceptance. Since no matter what Ford does you find it necessary to slam it your comments on any subject related to Ford are taken in that vein. The only solid proof on the subject of Ford’s level of quality is how their vehicles are rated by the consumers who bought them through their responses to independent third party surveys and those results speak for themselves.
“According to the Detroit News, tuition assistance, 401k matching and merit pay increases are all being reinstated for Ford’s white-collar employees.”
You call those bonuses? I certainly don’t. Benefits, yes, but not bonuses. Not having 401k matching is pretty crazy. If they had dropped medical insurance for their white-collar employees, would you call it a “bonus” if they re-instated it?
The entire attitude towards “bonuses” is stupid anyway. For some reason, people get much more upset at something called a “bonus” than the equivalent amount of money in regular salary. If they cut salaries but keep 401k matching, would people still be upset because the 401k matching was a “bonus?”
You’ve got to give people some hope (and I’m not talking the Obama kind). This move does not seem unreasonable; I doubt it will seriously impact Ford’s bottom line, but the article didn’t say what the total cost was. I think it’s a relatively inexpensive way to boost morale among the white-collar employees; and does it really affect the union’s view of things anyway?
Actually I think the term is pattern bargaining not platform. The rank and file turned it down because of decades old ,mistrust.
On the other hand, I think that the bonuses are justified. Just like I believe that restoring the 10% cut to GM salary was justified. Right now,more than ever, both companies need to retain experienced and dedicated staff. Cash has a way of accomplishing just that
Maybe,just maybe there is a future fo.r the domestic car industry. As a GM hourly retiree,I’m a lot more optimistic than I was a year ago.
Ford is the only domestic-based auto maker that has its shit together. And the onlty one I would support any more.
That makes sense…you really don’t want your money back do you?
I just don’t want to throw good money after bad.
Then by that logic, you shouldn’t buy ANYTHING from ANY of the domestic manufactures.
Well, as of this posting, Ford stock is up $0.3105, so it would appear that the market is supportive….
Merit increases are not bonuses. Bonuses are still on hold at Ford.
http://www.reuters.com/article/idUSSGE5BE0CN20091215
I would think that having a good paying job would be enough ‘bonus’ considering the current job market. But it seems like Ford and the rest of detroit are anxious to spend money when they have yet to show a profit. Must be some kind of ego thing. I say that they should wait to make a good profit before calling the recession over and the return of ‘good times’.
I’d hardly consider it “good times.” The programs they’re reinstating have been on hold for a long time – much longer than just the last 18 months. Plus Ford can’t afford any more “brain drain” than they’ve already experienced, so they need to have some incentive to keep their talent on board. We’re not talking executive comp levels here.
“But because Ford believes that, as President of the Americas Mark Fields puts it, “our plan is working,”
Ha! Mark, you have to believe it…true or not.
Circuit City said their “plan” was working as well.
Ford has finally reversed years of market-share loss. Ford has drastically slowed its cash burn (and actually started to accrue cash in the last quarter), contrary to the dire predictions of some people on this site. Ford is keeping inventories low and not basing its projections on dubious forecasts of a major economic rebound. The revamped Taurus and Fusion are getting good notices and solid sales increases, and the crucial F-150 is keeping its segment leadership.
None of this proves that Ford will thrive in the long term, but I would call it credible evidence that the company’s plan is working.