FORD Motor is eliminating stock award bonuses for about half of its middle managers in an effort to boost performance as the automaker confronts declining profits and high costs.
Ford has told employees roughly half of middle management will not 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 US salaried employees. Chief executive officer Jim Farley is pushing his salaried ranks to improve performance as Ford forecasts a year when earnings before interest and taxes will fall by US$2 billion or more.
“We are focused on driving a high-performance culture that recognises and rewards employees for their business contributions,” the automaker said on Tuesday (Feb 18).
Ford has struggled to rein in warranty repair costs and other expenses that Farley has said puts the company at a US$7 billion to US$8 billion disadvantage compared to rivals. The automaker also is projecting losses of up to US$5.5 billion in its electric vehicle business this year, which it is overhauling after losing US$5.1 billion on battery-powered cars last year. Ford is aiming to cut US$1 billion in costs this year.
“We are focused on closing our competitive gap over the next few years,” Farley told analysts on Feb 5 during the company’s fourth-quarter earnings call. “We are changing our culture to be more focused on quality and with accountable measures for all of our engineering teams and leadership.” BLOOMBERG
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