Ford says CEO will work for $1 to get gov't loans

TallBill

Lifer
Apr 29, 2001
46,044
62
91
http://www.google.com/hostedne...1he1gUER-fkqwD94QLH900

DETROIT (AP) ? Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when its CEO appears before two legislative committees this week.

Also, CEO Alan Mulally said he'll work for $1 per year if the automaker has to take any government loan money.

The plan Ford is presenting to Congress this week also says it will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.

Other cost-cutting actions include a plan to sell Ford's five corporate aircraft, the company said.

Mulally said in an interview with The Associated Press on Tuesday that Ford will emphasize its cost cutting efforts with the United Auto Workers union and will give much more detail to Congress than it did when lawmakers grilled the automakers' CEOs earlier this month.

The company said it also will accelerate plans to roll out electric vehicles as part of the plan it will present to Congress this week. The vehicles will come out starting in 2010 and include the Transit Connect small van and a car the size of the Ford Focus compact.

Mulally says Ford will seek $9 billion in government loans but may not need them. The Dearborn-based has said it has enough cash to make it through 2009 without assistance.

All three Detroit automakers are scheduled to appear before congressional committees Thursday and Friday to seek a total of $25 billion in government loans. Chrysler LLC and General Motors Corp. have said they are perilously low on cash and need the government loans to survive the recession and the worst auto sales environment in 25 years.

Mulally also said he will encourage other automakers to join forces to develop new battery technologies in the U.S. for future electric cars.
An electric car and profitability are hallmarks of a plan Ford submitted to Congress Tuesday.

Ford's plans call for an investment of up to $14 billion to improve fuel efficiency over the next seven years. The company said would improve the overall efficiency of its fleet by an average of 14 percent in 2009.

The company's plans to achieve profitability or break even by 2011 are based on industrywide sales estimates of 12.5 million units in 2009, 14.5 million in 2010 and 15.5 million in 2011.

The seasonally adjusted annual sales rate dropped to 10.6 million vehicles in October.

I'm betting that the automakers will get the bailout no matter what, but it seems like only Ford really gives a damn about actually trying to make money.

 

ProfJohn

Lifer
Jul 28, 2006
18,251
8
0
Nice to see him offer to take a pay cut, although $1 is a little low.

Perhaps he should work at the top of the union wage scale. And then get long term stock options that are only good if the company makes money.
 

Arkaign

Lifer
Oct 27, 2006
20,736
1,377
126
Ford has been doing a good job lately. I have an '08 Focus, I got a great deal on it, it's a no-frills solid little car, with outstanding fuel economy and excellent driving characteristics. Seems things are only getting better for them.
 

Saga

Banned
Feb 18, 2005
2,718
1
0
Considering his actual salary means little to nothing compared to his compensation from stock and his yearly bonus, all he really needs is the company to make money period (and his stock to actually be worth something) and he could probably easily work for nothing a year.

Not really that impressive. Would have been better if he just took a realistic salary of a few hundred thousand for the rest of his time as CEO.
 

GTKeeper

Golden Member
Apr 14, 2005
1,118
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0
Originally posted by: Izusaga
Considering his actual salary means little to nothing compared to his compensation from stock and his yearly bonus, all he really needs is the company to make money period (and his stock to actually be worth something) and he could probably easily work for nothing a year.

Not really that impressive. Would have been better if he just took a realistic salary of a few hundred thousand for the rest of his time as CEO.


I think all the execs and upper mgt need to cut their salaries FAST.
 

Strk

Lifer
Nov 23, 2003
10,198
4
76
As others have said, salary is meaningless. Steve Jobs does the whole $1 crap, but it's not like that's what he really takes home at the end of the year.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
I guess it's better than nothing, Ford is definitely in better shape than GM.
 

TallBill

Lifer
Apr 29, 2001
46,044
62
91
Originally posted by: winnar111
Cutting his salary won't save the company any significant amount of money, but thanks.

Then why did we have a dozen threads in the last month on CEO pay and private jets and spending?

Ford won't turn around because of things like this, they will turn around because they are producing a better car then the japanese. Now if they could cut their union labor costs, then they will make even more profit.

But its a hell of a lot easier to get the union to play along when you're making $1.
 

Drakkon

Diamond Member
Aug 14, 2001
8,401
1
0
Ford posted a 31% drop off in sales for this quarter - frankly I'm amazed it is that low. They are definitely in the best position of the 3 American automakers. If they bring a couple of their European models over and manage to sell them cheap enough to start turning a small profit they will be in much better shape come 2010-2012. Something tells me GM and Chrysler will submit plans nowhere near to what Ford is proposing. Ford seems to throw down the gauntlet setting their production plan and what they are willing to cut - it will be interesting if the others will do the same. Also Ford is not saying give us a loan - they are saying "if GM or Chrysler fail we need a loan so they don't drag us down with them and here are the steps we are willing to take" - almost sounds like Ford is putting the weight of the others on its back
 

CrackRabbit

Lifer
Mar 30, 2001
16,641
58
91
Originally posted by: Cattlegod
Here is Ford's entire submission to Congress:

http://media.ford.com/images/1...pany_Business_Plan.pdf

Cliffs from it.

1. Ford is ok right now, but might need money if the economy continues to go south.
2. If GM or Chrysler collapse it fubars Ford's supplier network due to the extreme amount of overlap.
3. Ford is trying to make better cars more efficiently and is moving towards a "global" product system.


It sounds like a reasonable plan to me.
 

dullard

Elite Member
May 21, 2001
24,998
3,327
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I understand the salary points that people are making. Ford cutting the CEO's compensation by $2 million won't make much of a dent in their deficit problem. However, it is certainly a start. It'll pay for the salary of several dozen employees during that time. Employees whos salaries are otherwise unaffordable at the moment.

But, it is just a start. Ford plans a nearly 40% cut in salary costs. Ford's CEO has about a $20 million total compensation package, so the $2 million cut in base salary is one good chunk on the way to that goal. Now, Ford just has to cut the CEO's benefits by another $6 million to reach that 40% pay cut goal (of course, they won't do that). If the CEO cut's his compensation package by 40%, it'll really help the motivation of the unions and non-union workers to cut their compensation by 40%. THEN we have a real turn-around possibility.

As it is, it appears like the big 3 will only do a 10% CEO compensation cut (offset by new bonuses in a few years to make up for the lost salary). Thus, it is too little. We need 40% or more cuts WITHOUT new bonuses. Make it a real statement.

I briefly scanned that Ford PDF. In their WORST case scenario, they expect about 10% growth a year in sales from today's levels. Someone really isn't yet thinking about the true worst case. Yes, 2008 levels are historically bad. But a true worst case will assume it stays bad or gets worse. Ford is still delusional about the possibilites on the downside.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
HAHA!!! Link

But what about the cost of a bailout? Behravesh says the $25 billion figure being discussed is "chump change" and the Big Three need closer to $100 billion in government aid.

This is EXACTLY what I have been saying. I've even called it chump change in another thread :D
 

JS80

Lifer
Oct 24, 2005
26,271
7
81
Originally posted by: winnar111
Cutting his salary won't save the company any significant amount of money, but thanks.

It sets the tone at the top and UAW rats can't point their finger to the top and say "see he makes a bazillion dollars!"
 

JS80

Lifer
Oct 24, 2005
26,271
7
81
Originally posted by: dullard
I understand the salary points that people are making. Ford cutting the CEO's compensation by $2 million won't make much of a dent in their deficit problem. However, it is certainly a start. It'll pay for the salary of several dozen employees during that time. Employees whos salaries are otherwise unaffordable at the moment.

But, it is just a start. Ford plans a nearly 40% cut in salary costs. Ford's CEO has about a $20 million total compensation package, so the $2 million cut in base salary is one good chunk on the way to that goal. Now, Ford just has to cut the CEO's benefits by another $6 million to reach that 40% pay cut goal (of course, they won't do that). If the CEO cut's his compensation package by 40%, it'll really help the motivation of the unions and non-union workers to cut their compensation by 40%. THEN we have a real turn-around possibility.

As it is, it appears like the big 3 will only do a 10% CEO compensation cut (offset by new bonuses in a few years to make up for the lost salary). Thus, it is too little. We need 40% or more cuts WITHOUT new bonuses. Make it a real statement.

I briefly scanned that Ford PDF. In their WORST case scenario, they expect about 10% growth a year in sales from today's levels. Someone really isn't yet thinking about the true worst case. Yes, 2008 levels are historically bad. But a true worst case will assume it stays bad or gets worse. Ford is still delusional about the possibilites on the downside.

hah kind of sounds like structured finance professionals when pricing mortgage securities put "worst case scenario" of housing prices to be 0% growth.
 

Strk

Lifer
Nov 23, 2003
10,198
4
76
Originally posted by: JS80
Originally posted by: winnar111
Cutting his salary won't save the company any significant amount of money, but thanks.

It sets the tone at the top and UAW rats can't point their finger to the top and say "see he makes a bazillion dollars!"

I'm pretty sure they can point out that he's made a little under $30 million in two years.
 

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,879
4,265
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First, if total compensation were a dollar, I would say good for him. Color me skeptical.
The Big Three's problem and soon to be Toyota's and everyone elses is the looming recession. I don't care if a car can make toast and bring it to me in bed, if I cannot afford to buy a car cash, and I cannot get credit then they're all screwed. As was pointed out in another thread, people can buy used cars, and auto makers do not make used cars.
 

GTKeeper

Golden Member
Apr 14, 2005
1,118
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0
Originally posted by: Hayabusa Rider
First, if total compensation were a dollar, I would say good for him. Color me skeptical.
The Big Three's problem and soon to be Toyota's and everyone elses is the looming recession. I don't care if a car can make toast and bring it to me in bed, if I cannot afford to buy a car cash, and I cannot get credit then they're all screwed. As was pointed out in another thread, people can buy used cars, and auto makers do not make used cars.

I don't think the recession is looming. Its here and has been for the past year.
 

Hayabusa Rider

Admin Emeritus & Elite Member
Jan 26, 2000
50,879
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Originally posted by: GTKeeper
Originally posted by: Hayabusa Rider
First, if total compensation were a dollar, I would say good for him. Color me skeptical.
The Big Three's problem and soon to be Toyota's and everyone elses is the looming recession. I don't care if a car can make toast and bring it to me in bed, if I cannot afford to buy a car cash, and I cannot get credit then they're all screwed. As was pointed out in another thread, people can buy used cars, and auto makers do not make used cars.

I don't think the recession is looming. Its here and has been for the past year.

It's a matter of degree. We've had some problems to be sure, but it hasn't kept many from owning new cars. I think we're about at that point now. When industries fail, that's a real problem.

Despite all else, it is not in our best interests to have the auto makers go bust. I'm not saying that I love a bail out, and have some real issues with it for many reasons, but even if I supported them I can't believe that it will forestall something I see as inevitable unless the economy improves.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0
GM reports sales down 41% year over year. And that is, as mentioned, before things have gotten truly bad, because although there's a recession, until either unemployment skyrockets or the dollars falls to sh*t, it doesn't really hurt most people.

By the looks of it, the thing GM should be doing now is cutting jobs hand over first. The demand is simply not there. Toyota, Honda, all of them cannot move anything.
 

Modelworks

Lifer
Feb 22, 2007
16,240
7
76
Put them sweeping the floors at Ford, then I would be impressed.
$1 salary means nothing to those that already have tons of assets.
 

chrisho

Member
Jun 17, 2008
63
0
0
Let us all be honest here.

What he gets paid doesn't matter. What they say in front of Congress doesn't matter.

Congressmen are simply looking for face time, they act more like elementary kids than leaders. They make stupid accusations, refuse to acknowledge when they are proven wrong, and generally offer no solutions. They just want face time.



The fact is, this is all a charade to hide the fact that the Democrats are going to 'relieve' the Big 3 of the health care/pension expenses by buying it out with our tax dollars. Thereby guaranteeing their voting base all the while looking magnanimous doing so
 

da loser

Platinum Member
Oct 9, 1999
2,037
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0
Originally posted by: chrisho
Let us all be honest here.

What he gets paid doesn't matter. What they say in front of Congress doesn't matter.

Congressmen are simply looking for face time, they act more like elementary kids than leaders. They make stupid accusations, refuse to acknowledge when they are proven wrong, and generally offer no solutions. They just want face time.



The fact is, this is all a charade to hide the fact that the Democrats are going to 'relieve' the Big 3 of the health care/pension expenses by buying it out with our tax dollars. Thereby guaranteeing their voting base all the while looking magnanimous doing so

cha ching!