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Automaker slashes premium pay, eligibility for white-collar workers to reduce costs

By Mark Truby / The Detroit News

Cutting back
Recent steps Ford has taken to reduce costs:
* Close three North American assembly plants by middecade
* Eliminate and reduce overtime
* Implement a hiring freeze
* Shift more health care costs to salaried and retired white-collar workers
* Cut personnel costs by 10 percent by year-end
* Reduce quarterly dividend from 30 cents a share to 10 cents a share

DEARBORN -- Ford Motor Co. is slashing overtime for white-collar workers as part of the company's efforts to reduce salary-related costs by 10 percent by year-end.

Ford is reducing the number of salaried employees eligible for overtime and cutting the hourly rate the company pays for overtime, according to two memos sent to employees last week.

"We recognize these are very difficult changes and we do not enter into them lightly," Roman Krygier, Ford group vice president in charge of manufacturing, said in an e-mail obtained by The Detroit News. "However, we believe that these actions are necessary given the business conditions we face."

Beginning Sept. 1, only general salaried personnel and managers who work directly with hourly workers in factories will be eligible for overtime.

Ford spokesman Oscar Suris could not estimate how many of the company's 46,000 white-collar workers will be affected. The changes only affect employees who are classified as exempt from federal overtime requirements, generally mid-level managers and above.

Starting Oct. 1, Ford is cutting overtime pay rates for salaried workers. For workers who earn $40 an hour or less, overtime will be paid at their normal hourly rate rather than time and a half. For those who make more, the overtime rate is capped at $40 an hour.

On Sunday and holidays, overtime will be paid at each worker's normal hourly rate, up to a maximum of $53 per hour.

Ford, which is slashing operating costs to offset difficult market conditions, has warned it will likely cut its white-collar work force later this year to achieve a 10 percent reduction in personnel costs worldwide. The layoffs could begin as early as October.

The overtime cuts are part of an effort to minimize the job losses.

"We are scrutinizing all of our salary related cost so the impact on jobs is as minimal as possible," Suris said. "This is just one piece of the objective."

Earlier this year, DaimlerChrysler AG's ailing Chrysler Group reduced the amount of overtime it pays 10,000 salaried employees.

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Stacy94PGT
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....