A $7,000 profit-sharing check was given by General Motors Co. to Mike Green, president of UAW Local 652 in Lansing, Mich., which is where GM produces Cadillacs. He said that since 2005, the workers haven’t received a raise so it’s “kind of nice” to be rewarded now. Green said that with this money, he will buy a new car for his son, give him a party, and save the rest in the bank.
GM’s workers in the U.S. have had to tighten their belts during the past several years but with the rebound in GM’s profits, they also benefit. Last Thursday, GM posted a net income of $7.6 billion. As a result, the 47,500 eligible UAW members get up to $7,000 in profit-sharing bonuses.
This is a record high for GM and it’s a climb from an average of $4,300 for its U.S. union workers last year. These GM payouts set for March 2 arrive on top of similar bonuses at Ford Motor Co. and Chrysler Group LLC. This money can aid in lifting the economies of states with unionized auto factories like Michigan, Ohio and Kentucky.
Harley Shaiken, labor professor at University of California at Berkeley, said, "This is a day that none of us thought we'd see." He said that UAW workers would be thinking that now would be the time to purchase something.
Donald Grimes, a senior research specialist at the University of Michigan who studies labor and the economy, said that the return of bonuses will boost spending and will help eliminate fears due to the Great Recession. He said that its savings rates peaked in December 2009 but that these have now decreased to 2004 levels. [source: Bloomberg]