The Ford Ultimatum: Car maker gives 'underperforming' white collar staff choice between severance or six-week enhancement plan amid $3 BILLION cuts

[Trigganometry]

• Underperforming staff with at least eight years' experience to be offered payoff
• They can also opt for an intensive 'enhancement plan' which lasts up to six weeks
• Michigan-based manufacturer post losses of $827million in most recent quarter
• Ford also plans to cut 3,000 jobs as it shifts its focus towards electric vehicles

https://www.dailymail.co.uk/news/ar...ges-underperforming-white-collar-workers.html

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[dmeyer302]

That was a garbage article. Here's one with a lot less sensationalism.

https://www.wsj.com/articles/ford-l...mployees-it-deems-underperformers-11667186857

 

[MountainGoat]

A lot of times companies target older employees just because they have been getting raises all those years. I've seen over and over companies fire guys making $30+/hr just to bring in new guys at $18 or even $16. Though looks like Ford isn't replacing them here. You know the old guys aren't going to tolerate a 6 week improvement program.

 

[theothersawyer]

That was a garbage article. Here's one with a lot less sensationalism.

https://www.wsj.com/articles/ford-l...mployees-it-deems-underperformers-11667186857

And a lot more pay wall....

 

[dmeyer302]

And a lot more pay wall....

Hmm it didn't for me (and I'm not a subscriber)

Ford Motor Co. is altering its approach to addressing white-collar employees deemed underperformers, telling managers that some of those workers must choose between severance or a performance enhancement program.

The changes in its talent-management policy mostly focus on employees who have eight or more years of service and whom the company has identified as demonstrating a pattern of declining performance, according to an internal email reviewed by The Wall Street Journal and confirmed by a company spokeswoman.

These employees now have the option of taking the severance, rather than enroll in the enhancement plan, which can take four to six weeks, the email and spokeswoman said.

Those who instead choose the enhancement plan but fail to improve won’t be eligible for any severance, according to the Oct. 4 email, which went to all U.S. managers.

The changes are intended to simplify how managers confront poor performance and provide an alternative to the improvement plan, which can be an intense period of work for employees who have made up their minds, the Ford spokeswoman said.

The amended policies, which apply to all U.S. salaried workers, went into effect Oct. 1, according to the email.

As part of the updated policy, managers who have low-performing employees with less than eight years can skip the performance-enhancement plan and move to an involuntary F 1.47% separation with severance, the Ford spokeswoman said. These employees can also receive some benefits, such as job-placement assistance, if they are let go, she said.

Ford has about 30,000 salaried employees in the U.S.

The U.S. auto maker made moves to streamline its white-collar workforce in recent months as part of a broader effort to slash costs by about $3 billion annually by 2026. The belt-tightening aims to free up more money to fund a costly long-term transition to electric vehicles, a market that is now dominated by rival Tesla Inc.

In August, the Dearborn, Mich., auto maker said it was laying off about 3,000 salaried and contract workers in the U.S., Canada and India, a move that followed months of company executives signaling to Wall Street that it needed to reduce staffing levels.

Ford Chief Executive Jim Farley has said the shift to electric vehicles is prompting a reassessment of the company’s resources, including its staffing levels in some areas.

“We absolutely have too many people in certain places, no doubt about it. And we have skills that don’t work anymore and we have jobs that need to change,” Mr. Farley said on a July earnings call.

Earlier this year, Ford reorganized its internal operations to create different divisions, including one that focuses exclusively on electric vehicles.

Ford, like other companies, could also face some attrition in the near term because of rising interest rates and the impact that is expected to have on pension payouts for those looking to retire.

Ford, in a separate email sent in September to employees, said that because of rising interest rates, the rate applied to the lump-sum pay for U.S. salaried workers who elect to retire is going to change as of Dec. 1. After that date, interest rates could reduce the overall lump-sum cash-outs by about 20% to 25%, the email said.

A Ford spokeswoman said potential retirees have until the end of November to decide if they want to retire by Dec. 1 and cash out their pensions before the IRS segment rates affect their retirement calculations.

Across the auto industry, executives are preparing for a potential downturn in business, taking steps either to reduce staff or freeze hiring.

Stellantis NV, the global parent of Jeep, Chrysler and other auto brands, said Friday it is offering voluntary buyouts to U.S. salaried employees as part of a restructuring to sharpen focus on new technologies and low-emissions vehicles.

The buyouts, initiated this month, target certain white-collar employees with benefit packages that wouldn’t otherwise be available to them, the company said in a statement.

 

[theothersawyer]

Hmm it didn't for me (and I'm not a subscriber)

Interesting! Thanks for quoting the article!

 

[dtech]

EVs require less labor and that extends to white collar employees as well - so reduction in overall staffing just another sign of the changing times. Farley says he's committed to following in Tesla's footprints and that means running a lean organization so Ford will be showing the older change resistant ICE employees the exit door.

 

[CB750F]

Oh man, I work in IT & I would love a sevenrance pkg... But, no one left to replace me. Maybe
with this next downturn many young folks will loose their job & they could replace
the old guard. Jezzz, what a way of thinking....

 

[rooster]

I took a 32 week severance package once, wild times! It's not as cool as it sounds, especially when my new job interview/offers were starting around Mar 2020 ... and disappeared for about 6 months.

 

[Joeiconic]

The downturn in performance by so many employees probably has a lot to do with them working at home in their pajamas. I think businesses are growing weary of having to coddle employees.

 

[egilbe]

The downturn in performance by so many employees probably has a lot to do with them working at home in their pajamas. I think businesses are growing weary of having to coddle employees.

Or the fact that they get more work done from home and no longer want to commute so the high performers quit. The low to middle performers were forced to take up the slack without a corresponding pay increase, meanwhile corporations are announcing record earnins and profits. That two hour commute each day just showed what a waste of time working in the office actually became.

The companies that are thriving are the ones that hired the high performers away.

 

[P. A. Schilke]

Hi Folks,

Been through this at Ford several times....Seems nothing changes.... It is pay for personality. If the Boss likes you then you are "saved"...otherwise out the door Much of the Ass Kissers were saved that needed to go.... What is difference is there is no "sweetner" to go....just severance $.... I still have a few friends at Ford and two of them are victims of this Ford initiative. Both are going to be hurt financially... One is an excellent employee with a bad boss and the other one is middle of the road...nice lady, but not motivated...Solid performer but no motivation....

Best,
Phil

 

[dtech]

Been a while since I did the corporate thing but some companies used work force reductions to remove the chaff and those who went against the grain, don't ask me how I know this or how many times......but life goes on and often for the better. I don't think Lee Iacocca ever looked back

 

[RedlandRanger]

Hi Folks,

Been through this at Ford several times....Seems nothing changes.... It is pay for personality. If the Boss likes you then you are "saved"...otherwise out the door Much of the Ass Kissers were saved that needed to go.... What is difference is there is no "sweetner" to go....just severance $.... I still have a few friends at Ford and two of them are victims of this Ford initiative. Both are going to be hurt financially... One is an excellent employee with a bad boss and the other one is middle of the road...nice lady, but not motivated...Solid performer but no motivation....

Best,
Phil

Unfortunately Phil, I don't think this is unique to Ford. I think it is a typical big company thing. I've seen it in my career over and over working for several large companies. I've been fortunate to not be the victim in these kinds of things usually opting to leave before things get that bad. But that is the biggest problem - typically the ones that leave are the ones you WANT to stay - many of the ones that are left are the dead wood that you were trying to get rid of in the first place, but since they don't have a lot of options they stick around until they are forced out the door.

 

[Dgc333]

FWIW, In my 45+ year engineering career with some of the biggest companies in the world one common thread was a ranking system for the employees. Your manager would rank his/her employees 1 to x and then the managers would get together and merge their rankings into one overall ranking of 1 to x (same thing happened with the managers). Normally this overall ranking would be used to hand out raises and promotions but it would also be used to weed out consistent low performers.

General Electric was the worst company I worked for and only lasted 3 years before quitting. Besides the ranking system they loved to load you up with "streach goals" and measure your performance against the streach goals. The better you did the more "streach goals" you got until you weren't successful on any of them. You could have come on board at GE and be a top performer and continuously worked at the same level and within 5 years be a bottom performer. Every year all the bottom performers were put on a performance improvement plan. If you were successful you kept your job otherwise out the door you went. The pressure was so intense that folks had nervous break downs or got sick. To top it off they had an attitude that the company was such a great place to work they did not need to pay as much. Once I realized what they were doing to the employees I left for another job that paid significantly more.

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