GM, Chrysler to announce record-high profit-sharing checks for workers

Article by Christian A., on February 16, 2011

As General Motors Co. prepares to negotiate a labor contract this year, the company said that it expects to give unionized U.S. hourly employees profit-sharing checks that average at least $4,000. GM said that this payout is more than double the previous record for bonuses paid to GM's hourly workers, the company said today.

GM said the previous record for its hourly workers' checks averaged $1,775 in 1999. Detroit carmakers (GM, Ford Motor Co. and Chrysler Group LLC) are preparing for contract talks this year with the United Auto Workers as the union is aiming to get a share of the industry's prosperity.

Sean McAlinden, chief economist at the Center for Automotive Research, said that GM wants to avoid annual pay increases and instead, it wants to give larger bonuses when the company is profitable. GM earned $4.77 billion in the first three quarters of last year. McAlinden added that all the companies “want to lock in on a fixed wage rate.”

He believes that unions will go for the plan if they find that they will receive more money with bonuses. GM is expected to reveal the payout for GM’s 45,000 eligible employees during the company’s earnings release in late February.

GM said that about 96% of its 28,000 salaried workers have bonus targets equal to 4 percent to 16 percent of their annual salary. GM also revealed that less than 1 percent of the company’s managers have target bonuses of at least 50 percent of their salary. [via autonews - sub. required]

Topics: gm, chrysler, profit

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