Ford initiates cost cutting measures

White-collared executives at Ford are in a fix.  The auto giant has reportedly told salaried workers that their pay increments would get delayed. To make matters worse, Ford is also reducing costs related to salaried employees by 15 percent.

It has been stated that Ford has as many as 23,400 salaried employees. This number is a fall of 32 per cent compared with 2005 figures. The company had kicked off its restructuring exercise way back in 2005.

According to industry observers, such a move might even trigger involuntary layoffs at the company. The auto behemoth is said to have even intimated the recent recruits that they will have to wait before joining their jobs a Ford till an announcement is made next. A report said that the company is offering the would-be employees $5,000 to compensate them for their troubles.

What makes Ford go in for such drastic action is the question everyone seems to ask. It is said that Ford is making these cost-cutting taking into account the recession in the US economy. It may be noted that the recessionist scenario in the United States has given rise to a steep fall in the sales figures across all industries. Sport utility vehicles and pick-ups have seen quite a drop too considering that the fuel-efficient cars are being sought after these days.

A look at the resulting numbers after the salary pruning proves interesting. According to Ford, the percentage of jobs done away with under the latest cost-cutting measures is likely to be different for different departments inside the organization.

According to the new recession beating measures, Ford has decided to delay pay raises in the United States and Canada from July 1 to October 1, 2008. The company also is suspending tuition and scholarship programs for employees and capping life insurance at $25,000, said a report.