Chief executive Jim Farley is eager to lower costs and improve quality of Ford models
November 4, 2024 at 09:50
- Company bonuses will be tied to a new performance system to keep employees more accountable.
- Bonuses could start to be adjusted as early as the current quarter.
Ford will slash company bonuses as part of a new system that will only reward employees when certain goals are met in a bid to cut costs.
Chief executive Jim Farley is eager to save money while also improving the quality of Ford models. Company bonuses will now be tied to a performance system to keep employees more accountable. Manager bonuses will be slashed by 65% of their current total. Speaking on Ford’s recent third-quarter earnings presentation, Farley said, “I’m proud of the progress we’ve made, but we are not fully satisfied.”
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“When we meet or exceed our targets for those factors – and we achieve the ambitious goals of Ford+ – the team is rewarded,” a Ford spokesman added. “We are focused on lowering our costs, improving our quality and making Ford a higher growth, higher margin, more capital efficient and more resilient business.”
The spokesman told Reuters that bonuses could be adjusted depending on the company’s performance through the fourth quarter.
Slashing bonuses isn’t the only way that Ford is looking to save money and offset the $1 billion charge it took after canceling plans for a three-row electric SUV. Late last week it was revealed the carmakeer will idle the Rouge Electric Vehicle Center, which builds the F-150 Lightning, from mid-November until January 6, 2025.
By pausing production, Ford will be able to clear some of the existing F-150 Lightning inventory, but the move still caught many off guard. Indeed, sales of the electric truck were up 86% through the first nine months of the year compared to 2023. Ford already reduced output at the truck’s production facility from two shifts to one and clearly isn’t selling as many examples as it had originally forecast.
Ford dealerships across the US are also being rewarded up to $1,000 for each F-150 Lightning XLT, Flash, Lariant, or Platinum model they order from one of the carmaker’s regional hubs, or ‘Rapid Replenishment Centers.’
