Ford Slashes Middle Manager Stock Awards to Trim Costs
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Ford Motor Co. is eliminating stock award bonuses for about half of its middle managers in an effort to boost performance as the automaker confronts declining profit and high costs.
Ford has told employees roughly half of middle management won’t get stock award bonuses, which are typically granted in March and vest over three years. The move affects about 3,300 of Ford’s 76,000 global salaried employees. CEO Jim Farley is pushing his salaried ranks to improve performance as Ford forecasts a year when earnings before interest and taxes will fall by $2 billion or more.
“We are focused on driving a high-performance culture that recognizes and rewards employees for their business contributions,” the automaker said in a statement Feb. 18.
Ford has struggled to rein in warranty repair costs and other expenses that Farley has said puts the company at a $7 billion to $8 billion disadvantage compared to rivals. The automaker also is projecting losses of up to $5.5 billion in its electric vehicle business this year, which it is overhauling after losing $5.1 billion on battery-powered cars last year. Ford is aiming to cut $1 billion in costs this year.
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“We’re focused on closing our competitive gap over the next few years,” Farley told analysts Feb. 5 during the company’s fourth quarter earnings call. “We’re changing our culture to be more focused on quality and with accountable measures for all of our engineering teams and leadership.”
Reuters reported the stock award cuts earlier.
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