For the first time in four years, Ford (NYSE:F) will be offering raises to management and sales staff. White collar workers at the automaker will also be eligible for bonuses, too, for the first time since the recession wiped out vehicle sales at Ford, General Motors (NYSE:GM), Toyota (NYSE:TM), Honda (NYSE:HMC) … and well, just about every other car company in the world.
But don’t think Ford Motor Co. is killing itself to find the cash. The nation’s No. 2 automaker is expected to post strong 2011 earnings next week, and turned a cool $6.6 billion in profits across 2010. The company allowed profit sharing in 2010, but this is the first boost to base wages since the Great Recession.
The average pay raise will be about 2.7%, according to reports. A Ford spokeswoman told CNNMoney that it’s a sliding scale, based on start dates and merit.
So… what about the guys and gals who grind it out in the plants, making Ford F-150s and rolling Ford Fusions off the assembly lines?
Don’t cry for them too much. Members of the United Auto Workers union that does the lion’s share of Ford manufacturing got a new labor pact last fall. It included a $6,000 signing bonus as well as early profit sharing payments. Union workers are also are guaranteed another $4,500 in bonus payments spread over the next three years on top of other profit sharing bonuses.
The last 10 years or so have been brutal for U.S. automakers Ford, GM and Chrysler. GM commanded over 30% of the domestic auto market in 2011, and now is under 20%. Ford went from almost 25% to around 17%, and Chrysler fell from 15% to 10% of U.S. auto sales — putting it now soundly in the backseat to Japan’s Toyota.
To make matters worse, not only does Detroit have less of the pie but the pie is much smaller. U.S. auto sales peaked in 2005 at 17.4 million and bottomed out at 10.6 million in 2009. Now sales are running around 12.7 million annually.
Who knows what will come next in the automotive industry, as electric vehicles are on the rise, China is the #1 auto market in the world and macroeconomic problems continue to weigh on the global economy. At least for the short term, Ford workers have something to be happy about.