Ford Execs Lose Bonuses

Shrinking profits resulting from declining sales and the Firestone tire recall have lead to the bonus cuts at the automaker where a major restructuring is underway.

Ford lost $551 million in the second quarter of this year due to the costs of the recall, and warned that full-year earnings would fall to about 70 cents per share, compared with $3.22 per share in 2000.

Since the bonuses, which totaled $442 million last year, are tied to profits at Ford, and profits have fallen so significantly, the bonuses will be axed.

No decision has yet been made regarding the bonuses of those lower down on the totem pole.

Ford’s lower-level white-collar employees and hourly workers represented by the United Auto Workers receive bonuses using a formula based on Ford’s North American profits.

Earlier in the month, the automaker announced plans to cut 5,000 white-collar jobs in North America and warned that a larger restructuring will follow.