Profit Sharing Will Give Each Ford Worker $3,700 on Average
Thousands of Ford Motor workers learned Friday that their share of the auto maker’s record $4.6 billion in 1987 earnings will average more than $3,700 each when profit-sharing checks are handed out next month.
Ford will distribute $635 million in profit sharing to hourly and salaried workers March 8. The No. 2 auto maker said it is believed to be the largest one-year payout ever by a major U.S. corporation.
Ford’s chief financial officer, Stanley A. Seneker, announced the figures to cheering workers at Ford’s Michigan Truck plant in Wayne, just west of Detroit. The announcement was broadcast live to 200 Ford facilities nationwide.
Ford, which earned the highest profit in automotive history in 1987, will know in coming weeks exactly how many of its 180,000 workers will receive a share, Ford spokesman Mike Moran said.
“The company’s U.S. employees can take pride in their performance as members of the Ford team. It is fitting that they will share in the results by receiving their largest profit-sharing checks ever,” Ford Chairman Donald E. Petersen said.
United Auto Workers Vice President Stephen Yokich, who heads the union’s Ford department, said the UAW was pleased with the payouts, which were first negotiated in 1982 for 1983 earnings.
But he added: “We would again urge Ford Motor Co. to allocate much more in capital investments from its huge profits into U.S.-based production of vehicles and components.
“The real ‘reward’ sought by U.S. workers, consumers and communities for their contributions to Ford’s success should be sizeable additional U.S. investments by Ford toward securing jobs for the future,” Yokich said.
Ford has added no assembly plants of its own in the United States in recent years. Instead, it is building some cars in Mexico, and its new Ford Probe sporty coupe is built at a Mazda Motor Corp. plant.
Ford also imports cars from South Korea and West Germany and plans to build a new Lincoln-Mercury luxury convertible in Australia.
In 1987, Ford out-earned industry leader General Motors for the second-straight year, its profit jumping 41% over 1986.
Workers at GM, which earned $3.6 billion, will receive no share of profit for the second-straight year. No. 3 Chrysler made $1.3 billion in 1987.
Although the formulas for profit sharing at Ford and GM differ, both are based on the company’s U.S. performance. Ford improved its U.S. earnings in 1987; GM’s fell by nearly half from 1986.
The lack of profit sharing at GM at the same time that the corporation handed out millions of dollars in executive bonuses angered workers. GM has switched to the Ford formula for the contract covering 1988-90.
In a related development, Ford’s shares rose Friday, recouping Thursday’s losses, as some auto industry analysts suggested that stock market disappointment with the company’s fourth-quarter earnings had been overdone.
Ford’s stock price jumped $2.50 to $44.75 in active trading. Its announcement Thursday of earnings that were well below what most analysts had estimated sent the stock down $2.25 a share.
The company’s 1987 earnings were a record $4.6 billion.