SCHAUMBURG, Ill. (STNG) ― Motorola on Wednesday announced it will permanently freeze its U.S. pension plans, temporarily suspend all matching contributions to its 401(k) plan and freeze some salaries for 2009.
Effective March 1, Motorola will permanently freeze U.S. pension plans, preserving vested benefits accrued by employees and retirees but eliminating future benefit accruals, the Schaumburg-based company announced Wednesday.
Motorola "intends to continue to provide funding to meet its pension obligations to present and future retirees," according to a release.
Effective Jan. 1, 2009, Motorola will temporarily suspend all company matching contributions to the Motorola 401(k) Plan. U.S. employees may continue to contribute to the plan but will not receive matching contributions.
Additionally, the company announced employees in many markets will not receive a salary increase in 2009. In addition, co-chief executives Greg Brown and Sanjay Jha will voluntarily take a 25 percent decrease in base salary in 2009.
Brown will voluntarily forgo any 2008 cash bonus earned under the Motorola incentive plan, the release said. Jha's contract provides for a guaranteed cash bonus for 2008, but it will be voluntarily reduced by an amount equal to Brown's forfeited bonus, with the remainder taken in the form of restricted stock, according to the release.
The actions are cost reductions of $800 million previously announced in October.
"The sustained downturn in the global economy requires that we take these difficult but necessary steps," Brown and Jha said in the release.
Motorola began 2008 with 66,000 employees, but approximately 4,800 have been laid off this year.
(Source: Sun-Times News Group Wire © Chicago Sun-Times 2008. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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