Ford to cut cost of salaried workers 15% by Aug. 1

The auto industry's putrid performance in May was an eye opener, and companies like Ford now have to readjust the adjustments they just made to their turnaround plans. Ford VP Jim Farley already braced his white-collar work force for a possible 12% reduction in their ranks, but a memo emailed today by Mark Fields, Ford's President of the Americas, reveals that the number of white-collar workers "reduced" will actually be 15%. Fields says in his memo (full transcript posted after the jump) that the company will "reduce salaried-related costs in North America by 15 percent by Aug. 1," which you, me and the guy who sits in the cubicle right under the AC vent know doesn't mean just cutting back on coffee filters.

The reductions will come from a series of steps that should ruin the day for lots of Ford employees wearing a tie or pants suit right now. They include "involuntary separations" (i.e. firings, letting go, RIFs, etc.), attrition (I'm leaving before you can fire me) and a consolidation of open positions (you now do his, his and her job plus what you were doing before). Other cost saving measures include further delaying merit-based raises from July 10th to Oct 1st (the Griswolds will not be going to Wally World this summer), suspending tuition assistance and dependent scholarship programs (education, not so much), and capping company-paid retiree basic life insurance for all existing and future retirees at $25,000 (that's still enough to buy a KISS Kasket for you and your spouse). As our esteemed colleague Mr. McElroy said a few posts ago, "It's a pretty grim picture. And it certainly is going to get worse." And so it has.

[Source: The Detroit News, The Detroit Free Press]