CNN Financial News Producer
Ford CEO Alan Mulally and Chairman Bill Ford, Jr. have decided to cut their pay by 30% for the next two years and to suspend bonuses for salaried workers this year.
Ford will also offer another round of buyouts and early retirements to all of its hourly workers and is suspending cash compensation for board members to help meet its goal of returning to profitability in 2011.
The moves come one day after the struggling automaker reached a deal with the United Auto Workers union that lets the company pay less cash into a retiree health care fund.
Members of President Barack Obama's auto task force reportedly met with top procurement executives from General Motors, Ford and Chrysler this week to discuss growing concerns about U.S. car-parts makers.
Auto suppliers have been raising the alarm over their finances in recent months, and the industry's trade group, the Motor & Equipment Manufacturers Association, submitted its own proposed rescue plan to the Treasury Department on Feb. 13.
The Wall Street Journal says task force members discussed a range of options with the executives.
Existing home sales unexpectedly sank 5.3% to a rate of 4.49 million units in January, down from the December rate of 4.74 million, according to the National Association of Realtors.
The group says the decline comes as some buyers forgo purchases in anticipation of government stimulus efforts aimed at boosting home ownership.
Stocks tumbled early Wednesday as a weaker-than-expected January housing report and ongoing worries about the recession ate into the previous session's rally.
The major averages bounced back from 12-year lows on Tuesday following comments from Fed Chairman Ben Bernanke downplaying bank takeover fears. But the gains have fizzled and the market continues its choppy ride.
Gas prices dropped 9-tenths of a cent overnight to $1.891 a gallon. 9 states have regular unleaded gas prices of $2 and higher. 41 states and the District of Columbia have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.540). The cheapest gas prices are in Missouri ($1.675)
Finally, there were fewer mass layoffs in January, with the brunt of the job casualties occurring in the South and in temporary-help services, according to the U.S. government.
In January, there were 2,227 mass layoffs, which resulted in 237,902 job cuts, according to the Labor Department. There were 48 fewer mass layoffs compared to December, but the number of unemployment claims increased by 11,785.
Mass layoffs are those that involve 50 or more job cuts in a single sweep.
Filed under: Andrew Torgan • auto bailout • Economy • Finance • Gas Prices • Oil • Wall St.
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It shamed for every car makers to call for public money.
They pay $2per Kg. of steel and sell with more than $25; how
whey loose? wrong management and old style.
Bravo.........it is a start. Now where are all the bankers hiding??? I don't care if it is just a band aid. It is alot better hearing this than they went on a partridge hunt, personal spa weekend, oh ya, a trip to Vegas.........not to mention giving themselves a bonus that amounts to more than alot of people will see in one lifetime.
With the steps that Ford has taken on its own will it even need a bailout? I remember from the start they said they may not need government help – I hope they don't and that they figured out how to stand on their own to get back to being successful.
Why is there is so much emphasis on the auto-makers when Wall Street really screwed us from behind and laughed in our faces?
This nation is in real trouble with everyone concerned only with their piece of the pie. While our house burns down we argue over whether Obama wore a flag pin. We have goten too used to being led astray by smart but unwise politicians and the media. I am specially disappointed in the media. Were are they when all of these things are happening. This bank scandal took years to come this state of afairs. Where was the media? They should be ashamed of not doing such an important job for the welfare of our society.
It's not as simple as corporate greed for the sorry state of affairs we are in. The unions and their unwillingness to make consessions on the real important issues is an important reason for this mess. I mean, these crappy cars being produced by the US were build by lazy and sorry union employees. Employees that can't be touched by a supervisor unless you have video. The unions and their sorry membership are as much to blame for this mess.
To Michael "C":
If you actually listen to the news you would know that Ford has not taken any of the auto bail-out money. They refused it.
Quit being so negative and give credit when and where it is due.
GM seems to be the irresponsible one, and Chrysler too to a lesser extent. Ford has done rather well considering everything they are up against.
Their lastest actions are more than symbolic. They are doing what our president is asking of them. I give them credit. Now if the banks would just start giving credit to Americans, cars companies would do just fine.
@ Margaret.... Yes, Margaret, that's what the GOPers are doing before our very eyes! I couldn't believe Jindal's "response" to Obama's articulate and thoughtful speech!
@ Michael "C".... I AGREE! Well said. Its not often I agree with someone on the "right."
In fact, before we give the Car makers one dollar they should agree to FIRE ALL the CEO's that led their companies into this disaster!
And yeah..... no raises for the fat-cats. GREED IS OVER!
The republicans and Democrats are the same!
Republicans = The New Democrats
Democrats= The New Socialist
Ron Paul = Conservative ( Not Republican)
Republicans don't stand for conservatism. Get that straight.
Boo-hoo-hoo! The Ford Executives are geedy, greedy, greedy. They should have put the brakes on their accelerated salaries a long time ago.
Here is just another fatal collision about to occur with no air bag or seat belt.
I can't say I feel sorry for the gas guzzlers. No, no. They can kiss my bumper and use their own jack to fix their blow out.
Call a tow.
It's about time Ford exes took a pay cut. They should have done that months ago.
They smiled; they laughed; they giggled; they chuckled at them Idiots of Japanese, Korean and European Automakers who so diligently invested in Research and Development, Alternative Fueling, Lean Manufacturing and CEO’s with Integrity.. But now, the only thing they can do is fart and stink up the place. If all American Automakers go out of business Today.. Tomorrow the Japanese, Koreans, Germans and Europeans Automakers will move in and create solid jobs for American people. So Obama can’t figure that out? Somebody get them sorry excuse of people off the stage.
I agree with Michael, too little too late!
These American Car companies knew that these cars they were building were not what Americans wanted or needed and they continued on because it was all about them padding their pockets!
And on top of that what happened to the days where companies took care of their own problems? This is the first time in history that any company has had the audasity to ask our Government for a handout!
Put the money that ford over paid you CEOs and heads over the years back into your company and fix it yourself!
They can all go under for all I care I will never buy another american made piece of junk!
In all fairness, let's not single out Ford. Its the capitalistic way. Maximize profits and pad your pockets. Reaganomics is fundamentally flawed because it allows, if not encourages, this behavior. While I believe the concept was made in good intention, the principles are inane. Deregulation of huge corporations? The government's duty is to monitor and moderate and serve the populace, not to assuage the greed of these ultra-patricians. Anyway, this is a commendable stance on behalf of the Ford Motor Company. These CEO's will still live extravagantly without huge bonuses. And the practice of cutting jobs and cutting corners to ensure their bonuses is vile and nefarious. Its happened here in my home town and its an irresponsible and dishonorable act.
Ford is the best of the three,and if I'm correct did not accept bail-out money. They have shown over the past 5 years innovation in implementing hy-brid,electric vehicles! Their Chairman Mr.W. Ford Jr. has been a decade long+/+ advocate of alternate (integrating solar/battery) fuel energy,and has done a remarkable job bringing his company into the 21st Century! His contemporaries are the laggards and should be forced into Chapter 11,and if push comes to shove Chapter Vll,period! Toyota,and Honda will cannibalize GM alive,whereas Chrysler is a private company, and has no right what so-ever getting public money in the first place,...JMHO
I think the article above speaks for itself regarding the decline in home sales. Who, in their right mind, wouldn't wait for a government handout as an incentive to buy a house. Sure wish I would have waited 14 more years to buy my house and I would receive this handout as well.
I don't see how any of your comments are related to the article above. Maybe you can find another site on the internet that deals with your apparent distaste for the Republican party.
Two points on money that could be saved in this economy:
1. Every branch of government is on a budget. At the end of the year, there is a tremendous spending spree because we have the understanding if we don't spend the money, it will disappear in the following budget. There ought to be a method of this money being returned to the piggy bank, and if funds are cut for the following year and something is needed in that department, a withdraw could be made with accountability being represented. I have witnessed in my small community, state of the art equipment at thousands of dollars coming in in the final hours of the fiscal year, just to use up all the money from the year's previous budget.
2. What ever happened to the Savings Bond program? People were encouraged to support the government through this process during my growing years. Ads ran suggesting how patriotic it is to buy bonds. These bonds seem to me to be more of the grass root and affordable way for those who are in the lower spectrum of the middle class to save a bit and support the government.
Corporate greed is the reason Ford Motor Company is own it knees. Now the CEOs have agreeded to take a 30% salary cut to deal with those remaining (less the dead bodies)-–too little-to late–when your company is hemmorhaging-–it is futile to put a band-aid on the injury-–just another token gesture to get more federal assistance.
McCain, Palin, Limbaugh and now Jindal ....is the Republican party trying to self destruct ? Can't believe you thought he rated air time.
About 98% of us here in Jamaica admire and support Obama ...but does'nt the USA need a credible opposition ?