Ford CEO Jim Hackett won’t be following his CEO rivals in doling out bonus payments to employees on the heels of tax reform, but says his workers will benefit anyway.
“Because some of the tax moves are actually enhancing profits … employees will see a benefit, but there’s not a stand-alone distribution, that doesn’t make sense,” Hackett told FOX Business’ Jeff Flock during an interview at the North American International Auto Show in Detroit.
Currently Ford has a profit sharing plan in place. With the passage of tax reform those payments could become even more lucrative for employees.
“Last year we paid a $9,000 bonus to employees, we’re profit sharing that way, so any kind of effect in tax improvement goes into profits and then is distributed. So we’re going to be paying bonuses this year to our employees with something that we were already counting on doing,” said Hackett.
Ford is also in the middle of a turnaround under Hackett’s direction. At the auto show, the company announced it will spend $11 billion to ramp up electric cars, among other initiatives. Earlier this month, Ford reported December total car sales rose 0.9%, while F-Series pickup trucks posted their best year since 2005, rising 9.3%. The stock has gained nearly 6% this year.
About 2 million workers will soon get higher paychecks or a financial boost in the form of a one-time bonus and/or other incentives as companies including AT&T (NYSE:T), Walmart (NYSE:WMT) and Wells Fargo (NYSE:WFM) to name a few, all reward employees with various financial perks. Economists say these payments will likely find their way back into the U.S. economy.