Over $200 million was spent by General Motor Co. earlier this week to pay a lump-sum inflation bonus of up to $700 to its 267,000 hourly retirees and 72,000 surviving spouses. Next week, it would be Ford Motor Co.’s turn to pay out over $70 million for the same thing.
Chrysler spokeswoman Shawn Morgan said that Chrysler Group paid $35 million this month to UAW-represented retirees and surviving spouses and had also given out another $6 million to hourly retirees represented by other unions.
The Detroit 3 were obligated to pay the UAW payments by the master UAW contracts. Inflation adjustments will not be received this year by active hourly employees at GM, Ford and Chrysler.
As part of 2007 and 2009 contract concessions, the company gave up a cost-of-living allowance this year and next. GM has 53,000 hourly employees and Ford has 41,000. Salaried employees at the Detroit 3 do not get COLA payments.
This month, GM said that its 26,000 salaried employees will not be getting salary increases in 2011 too. GM spokeswoman Sherrie Childers Arb said that GM made the payments to its hourly retirees on Dec. 13.
Since the $700 inflation catch-up comes in December each year, hourly retirees refer to it as a “Christmas bonus.” Meanwhile, surviving spouses can get up to $455.
According to Dick Danjin, a retired GM employee and one-time UAW International representative, he would have wanted that the COLA was given to the active workers too, especially considering the improvement in GM's profits and Chrysler's financial performance. [via autonews - sub. required]