Carmakers in the United States – General Motors Co., Ford Motor Co, and Chrysler Group LLC – plan to distribute checks totalling over $750 million to about 122,000 workers. This comes after the Detroit carmakers posted record-breaking profits in North America. Ford will be handing out a $8,300 profit-sharing check, the highest ever by a Detroit carmaker.
The payout is good news for new Ford employees, who received just around half of what senior workers get, as it means they get a 23-percent hike to their annual compensation of $36,000. General Motors has yet to disclose that amount its employee payout, but it is expected to more or less reach $7,325 when it reports year-end earnings.
Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research, said that if the payout exceeds that amount, it would surpass the cumulative record of $17,875 set in 1999, when carmakers raked in billions in profit thanks to high demand for sports utility vehicles.
On the other hand, Chrysler Group is handing $2,250 out to its hourly workers. Donald Grimes, a senior research specialist at the University of Michigan, remarked that the payouts will contribute $350 million to the economy and generate 3,500 jobs in Michigan alone.
He noted that the huge worker payout is “a much bigger deal” than the tax refunds people get. GM posted $5.48 billion in profits in North America in the first nine months of 2012, and is expected to log $1.17 billion in earnings before interest and taxes in the fourth quarter of the year, according to the average of four analysts' estimates