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Ford Hands Raises, Bonuses to White-Collar Workers

First raise since 2010.

by on Jan.19, 2012

Ford CEO Alan Mulally: time to share the wealth.

About 20,000 Ford workers will have reason to celebrate after receiving their first combination of merit raises and bonuses since 2008.

The announcement – first revealed in a letter to workers last week – reflects the maker’s increasing fortunes, Ford reporting $6.6 billion in earnings for the first three quarters and expecting to add about $1.7 billion more to that tally, according to analysts’ estimates, when it reports earnings for the last quarter later this month.

The raises, which will take effect on April 1 should average about 2.7% and apply to 20,000 salaried employees – most of them in the U.S. and Canada.

Workers were given performance bonuses last year, and merit raises in 2010.  The last time they received both bonuses and pay hikes was in 2008.

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White-collar workers have normally received substantial financial packages in the Detroit industry but pay and benefits were sharply curtailed during the years leading up to the Great Recessions, when both General Motors and Ford were forced into bankruptcy.  Ford was able to avoid a Chapter 11 filing by taking on about $30 billion in debt – which it is now rushing to pay down.

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Ford Posts $6.6 bil Profit for 2010

Workers to share in upturn with $5,00 profit-sharing checks.

by on Jan.28, 2011

Big profits still fall short of analyst expectations.

Ford Motor Co. has posted its biggest profit since 1999 – although the numbers fell more than a billion dollars short of what many had anticipated the automaker would announce.

Ford officials said they earned $6.6 billion in 2010, which will trigger profit-sharing checks for 40,600 U.S. hourly workers of $5,000, more than union members have taken home since 2001, when profit sharing generated payments of $6,700.

“We’ve always said that all our stakeholders will benefit from the growth of the company and improving profitability, and I think this is a specific reflection of that,” said Ford Chief Financial Officer Lewis Booth. “It’s a delight to be paying profit sharing.”

Keep On Top!

One reason the maker fell short of analyst expectations was the one-time, $960 million charge it took to cover the cost of paying down debt.  The maker took the prescient step of lining up extensive financing sources as the nation fell into recession.  But it is now racing to pay down those loans and trim its operating costs.  CEO Alan Mulally, in November, authorized paying down another $1.9 billion in outstanding debt.

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