After posting a $US5.8bn third quarter loss, Ford is scaling back health care benefits, raising premiums, eliminating merit pay for 2007 and delaying December pay cheques by one week.
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Reuters, citing a Ford spokeswoman, said the automaker would eliminate health insurance for Medicare eligible retirees in 2008 and raise health care premiums in June 2007 for employees by about 30%, the second straight year of increase.
It will also replace its traditional health coverage for salaried retirees over 65 with a $US1,800 annual stipend that they can use to buy supplemental health coverage in addition to government-run Medicare.
Ford will stop paying for any health care coverage for dependent children of retirees who are over 65, Reuters said.
Instead of paying employees before the holidays on 22 December, as is the tradition, employees will receive their salary on 29 December.
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By GlobalDataOutlining the measures in an email to employees this week, Ford Americas chief Mark Fields reportedly said: “[The payroll] change alone will save the company $70m of cash flow this year without reducing compensation to employees.”
Reuters noted that Ford would, however, reinstate matching contributions for salaried employee 401(k) retirement plans.
