Ford CEO Jim Hackett reached out to employees in a letter Thursday morning to warn there would be executive pay cuts and a stall in employee merit raises until October 1, among other matters heading into the coming weeks. The move comes as the Ford CEO aims to boost Ford’s financials and prevent job cuts in the wake of the ongoing crisis around COVID-19/Coronavirus.
“Sacrifice starts at the top. That is why the top 300 Ford senior executives will defer 20 to 50% of their salaries for at least five months starting May 1,” Hackett shared in an email sent to employees. “Bill Ford has decided to defer his entire salary for this period.”
In an attempt to ease financial pressure brought about by the global pandemic, the Ford CEO announced that the automakers 300 top executives will defer 20% to 50% of their salaries for at least the next five months, starting May 1. According to Hackett, the total amount of deferred salary will be paid to the executives after the automaker has repaid at least $7 billion of its automotive debt. In addition, the great-grandson of Ford’s founder Henry Ford, and Executive Chairman Bill Ford Jr., will also defer 100% of his total cash salary and that Hackett himself will be deferring 50% of his total salary.
Other aspects of Hackett’s email include the suspension overtime for salaried workers, a hiring freeze for noncritical skill positions and a potential reduction of work schedules and compensation for workers whose jobs are unable to be done from home. The Ford CEO also said there may be offered voluntary sabbaticals, and did not rule out the prospect of potential job cuts should the crisis go on for longer than originally anticipated.
“If the effects of the coronavirus on the global economy and Ford go on for longer — or are more severe — than we currently anticipate, we may have to take tougher actions. But not today,” shared Hackett.
As further matters develop, updates will be provided accordingly. In the meantime, stay safe, stay home and wash your hands.