DETROIT, July 16 (UPI) -- Ford Motor Co. could post a profit after a year of losses when it reports second-quarter earnings on Wednesday.
Chairman and Chief Executive Officer Bill Ford Jr. is asking key executives to sign a tough non-compete agreement in return for what could be lucrative stock options in the future. Ford also reportedly is considering an accounting change to treat stock options as an expense in routine financial disclosures, a change that would cut millions from profits.
Ford spokeswoman Anne Marie Gattari told the Wall Street Journal the automaker in May asked all 52 of its top corporate officers, including vice and group vice presidents, to voluntarily sign a strict non-compete agreement.
The stricter loyalty covenant will be in the contracts of all new executives who join Ford.
"It's a competitive environment and we are looking to protect our human resources and proprietary information," Gattari said.
She said such agreements were not uncommon in industries as competitive as the auto industry. Chrysler asked senior executives to sign a similar non-compete agreement after the Chrysler Corp merged with Germany's Daimler-Benz in 1998 to form DaimlerChrysler AG.
After losing a record $5.45 billion last year and cutting thousands of jobs in a major restructuring, key Ford executives were considered vulnerable to poaching by other manufacturers. Former luxury car division head Wolfgang Reitzle almost jumped to General Motors last March before taking a top job with a German industrial firm.
Ford has lost market share to GM over the past year but would have earned 85 cents a share in the second quarter of 2001 before taking a $2.1 billion after-tax charge for expanding the Firestone tire recall to include all Wilderness tires.
