DETROIT — Ford Motor Co. is likely to put salaried employees on rotating unpaid furloughs if the coronavirus crisis lasts beyond early May, CEO Jim Hackett said.
Speaking to WWJ-AM in Detroit on Tuesday, Hackett said Ford still hopes to make it through the pandemic without taking such actions. He mentioned moves Ford took last week, including deferring executive compensation, delaying raises and cutting overtime.
“I’m trying to keep everything status quo, but as time goes on, I’ll have to make more changes,” Hackett said. “This furlough idea is probably the best one. Using furloughs is a smart way where you can dial down some of the compensation. It’s painful, but the jobs aren’t in question. Then as you get through it, you dial back up the pay. That would be the next thing we would do.”
General Motors and Fiat Chrysler Automobiles already have said they would defer 20 percent of salaried employees’ pay, giving them the lost earnings at a later date. In addition, GM said 6,500 U.S. workers — mostly people in engineering and manufacturing functions who cannot work remotely — will be placed on leave and receive 75 percent of regular pay during the downtime.
Instead of asking employees to work for lower pay, Hackett said Ford could use a schedule under which employees would work three weeks, then be off one week without pay, for a number of months.
“It’s a difficult dance because to get the company back up and running, we need our people at work,” he said.
Hackett said Ford would likely begin furloughs if the situation lasts beyond early May.
“We would push ‘go’ on that when we felt the rapid return to work had been jeopardized,” he said.
Earlier Tuesday, Ford said it would indefinitely delay reopening its North American plants after last week targeting a mid-April return for some of them. To date, three UAW-represented Ford workers who contracted the coronavirus are known to have died from it.
Hackett told WWJ he wanted to avoid reopening plants too early and that he hoped to get production running after April.
“My gut tells me we’re into May now,” he said. “We’re not projecting a date until the president actually comes through with, ‘I want to turn the economy on by X date.’ That’s really the healthiest thing, is for all of us to be coordinated together.”
