Sunday, February 13, 2005

Ford will hike pay on time

Eligible salaried employees and top execs will get merit wage raises in April.

By Eric Mayne / The Detroit News

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For Ford Motor Co. employees expecting merit pay increases this year, the bigger check will be in the mail a little sooner than in the recent past.

About 38,000 white-collar workers in the United States and Canada are eligible for merit pay hikes beginning April 1. Over the past three years, citing the need to reduce costs, Ford delayed merit pay increases by three or more months.

Ford has also lifted a freeze on merit pay increases for 53 top executives, including Chairman and CEO Bill Ford Jr. Since becoming CEO in October 2001, Bill Ford has received stock options instead of a cash salary. While senior executives received cash bonuses for 2003, Bill Ford has been granted "stock equivalents" instead of a performance bonus since becoming CEO and given $1.5 million in bonus money to a tuition assistance program that benefits the children of Ford employees. Details of Bill Ford's 2004 compensation will be disclosed when Ford issues its proxy statement later this spring.

Ford's financial outlook has improved after the automaker posted $5.4 billion in losses in 2000 and 2001.

Last year, earnings reached $3.5 billion -- a sevenfold jump from 2003 results.

Ford has 38,000 white-collar workers in Canada and the United States -- including 33,000 non-management employees -- eligible for merit pay increases this year.

The freeze on merit pay increases for senior executives went into effect in 2000. And performance bonuses have been suspended for three years.

Performance bonuses payable in March have already been approved for eligible salaried workers, Ford spokeswoman Marcey Evans said.

Analysts say Ford risked losing talented employees if didn't reinstate raises as its financial performance improved.

"Job change with an employer is far more expensive then not being on parity with your salaries," said John Dugan, president of California-based J.H. Dugan and Co., which places engineers and managers with auto suppliers.

"The employer doesn't gain very much by being noncompetitive," Dugan said. "People will transfer, move on, or change companies."

In March, Ford's 94,000 hourly employees covered by the company's contract with the United Auto Workers union will receive profit-sharing checks that average $600.