Ford Motor Co. will give performance bonuses to its U.S. and Canadian salaried and hourly employees because the company made quality and cost-cutting improvements in 2006, the company said Thursday.
Ford, which lost $12.7 billion last year and has mortgaged its factories to borrow money to cover restructuring costs and losses expected until 2009, said the bonuses would range from $300 to $800 for employees below the title of manager.
The company would not reveal the size of bonuses for executives with the title of manager and above, nor would it disclose the total cost of the bonuses. Managers and above will receive more than the range of payments to lower-level workers.
"Because we did not accomplish all of our objectives last year, the awards will be modest," Chief Executive Alan Mulally said in an e-mail to employees on Thursday. "Still we want to recognize and reward your accomplishments, because you made vital contributions to our future."
The e-mail said the awards were being given because Ford workers helped the company significantly reduce costs and continue to close the quality gap with its competitors. They were made with the approval of the United Auto Workers and Canadian Auto Workers unions, the e-mail said.
Only those with a pay grade of manager or above will get the bonuses outside the U.S. and Canada, and some Ford Motor Credit Corp. employees will not get the cash depending on their compensation plan, said Ford spokeswoman Marcey Evans.
The money will go to workers who were with the company as of Dec. 31, she said.
Ford hasn't calculated the exact number of employees who will get the money, Evans said. The company had about 128,000 hourly and salaried workers in North America as of Dec. 31.
If all received the minimum $300 bonus, the total cost to the company would be more than $37 million, which is likely to be a low figure.
Efraim Levy, senior industry analyst with Standard & Poor's, said the bonuses are money well spent.
"I think it should be a relatively small amount," Levy said. "You get something back, not financially, but in terms of esprit de corps. A happier employee is a better employee. There's value to it."
Evans said Ford did not reach its 2006 goals for profit and market share, which declined. But she said the bonuses are aimed at encouraging continued performance.
"The company believes that pay that recognizes performance is the key to maintaining a skilled and motivated work force," she said.
The UAW said in a statement that Ford is recognizing the hard work of its members with the money.
"Ford and the UAW are working together to turn this company around, and to preserve good-paying manufacturing jobs in the United States," said Vice President Bob King, who directs the union's Ford Department.