US autoparts sector firms cut pay

Until recently, broad retreats from generous salaries and benefits were largely confined to the high-technology industry. But now they are happening in other hard-hit sectors, including auto makers, a…

Until recently, broad retreats from generous salaries and benefits were largely confined to the high-technology industry. But now they are happening in other hard-hit sectors, including auto makers, airlines, media, hotels and certain financial services. In the auto industry, Delphi Automotive Systems Corp., the largest parts maker, has already suspended its matching contributions to employees“ 401(k) savings plans. On 3 December, management told staff members the company was temporarily halting a programme under which salaried employees got as much as US$ 1,250 for each dependent attending a four-year college. Rival parts maker Visteon Corp. says it will reduce 401(k) contributions for salaried workers, effective 1 January. And some Detroit-area businesses that supply car makers with engineering or administrative contract labour recently sliced such employees“ wages, froze their merit raises and weakened their health-insurance benefits. Ford Motor Co. announced that it will eliminate its 60-cents-per-dollar matching contributions to salaried staffers“ 401(k) savings plans, suspend merit raises for about 2,200 senior executives and increase out-of-pocket costs for certain salaried employee and retiree health plans. It also is evaluating how deeply it should cut its 45,000-person salaried work force. Facing a worsened slowdown, about one-fourth of 110 US companies in a variety of industries have decreased or delayed raises at all job levels since the 11 September terrorist attacks, says a poll by human-resources consultants Watson Wyatt Worldwide in Washington. About 16% of those surveyed have cut or frozen senior managers“ salaries, while 9% have done so for hourly employees.