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Automakers Getting Ready to Pass out Profit-Sharing

GM employees bust bank with this year’s payout.

by on Mar.02, 2015

GM CEO Mary Barra said hourly employees weren't to blame for the $3 billion in costs related to faulty ignition switches so they'll get record-setting profit-sharing checks this year.

General Motors, FCA US and Ford Motor Co. will begin distributing profit-sharing checks soon, setting the stage for what is certain to become an intense debate over compensation for the companies unionized hourly workers.

Based on General Motors’ North America 2014 financial performance, the company will pay, on average, up to $9,000 to approximately 48,400 eligible GM U.S. hourly employees. The compensation was larger than allowed under the contract because GM elected to pay profits based on the company’s earnings before the $3 billion deduction to cover the cost of recalls. The recalls were the fault of GM’s management not GM’s workers, GM Chief Executive Officer Mary Barra said.

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“UAW members at General Motors are proud of what they do and see profit-sharing as another validation of their hard work producing quality vehicles. Profit sharing does more than put a few dollars into a member’s pocket. It means more to spend in the community and each little bit makes a big difference for everyone,” said UAW vice president Cindy Estrada, who is in charge of the union’s GM Department. (more…)

Ford to Pay Out Record Profit Sharing Bonus

Average hourly worker to receive $8,300.

by on Jan.30, 2013

A worker at the Ford plant in Wayne, Michigan assembling a new Focus sedan.

Ford Motor Co.’s U.S. workers will share in the company’s strong 2012 performance, each union employee receiving, on average, an $8.300 profit-sharing bonus.

That’s the single-largest profit-sharing payout from any domestic automaker since the United Auto Workers Union introduced the program as a trade-out for concessions during 1983 contract negotiations.

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The profit-sharing program is tied to Ford’s earnings in North America where it reported a pre-tax profit of $8.3 billion for 2012. The maker meanwhile reported it earned $1.7 billion before taxes during the fourth quarter, Ford’s best figure for the three-month period in more than a decade. However, net income for all of 2012 declined $307 million, excluding special charges, to $5.7 billion.


GM To Give Hourly Workers $4,000 Bonuses

Falls short of Ford’s profit-sharing package.

by on Feb.14, 2011

GM CEO Akerson sending a kiss - and more than $4,000 in cash - to hourly workers.

General Motors CEO Dan Akerson has a big Valentine’s Day card coming in the mail for 45,000 workers.

Though they’ll still have to wait a bit for delivery, they can anticipate a profit-sharing bonus of at least $4,000 apiece, the executive announced today.  That’s more than double the previous record $1,775 profit-sharing payment workers received from GM – and that was back in 1999.

But the maker’s bonus still falls short of the $5,000 Ford Motor Co.’s hourly workers will be getting.  Ford decided to pay out significantly more than it was required to, in fact, under its agreement with the United Auto Workers Union.

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That reflects concerns Detroit automakers have about how workers will respond to the domestic industry’s fast-improvement health.  UAW members granted billions of dollars in concessions, first as part of their 2007 contracts with the U.S. Big Three, and then again to help the makers hobble through the economic downturn that saw auto sales plunge to their lowest levels in decades.


Chrysler Reduces Net Loss, Posts Operating Profit for Q4

Declaring turnaround firmly underway, maker plans bonuses for both hourly and salaried workers.

by on Jan.31, 2011

"It would have been inexcusable" not to reward workers, said CEO Sergio Marchionne.

Showing further signs of a comeback from its 2009 bankruptcy, Chrysler significantly narrowed its net loss for the fourth quarter of 2010 while posting an operating profit for the final three months of the year.

The maker, meanwhile, said it expects to have its bottom line firmly back in the black for all of 2011 – with projected earnings of somewhere between $200 million and $500 million.  Strong earnings will be essential for the maker’s plan to stage an initial public offering sometime during the second half of the year.

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The good news will be shared with company workers, CEO Sergio Marchionne alerting workers in a company-wide e-mail that both salaried and hourly staff will receive “performance award payments.”

“I want to express my gratitude to everyone for their hard work,” said the chief executive’s note.  “You are the authors of this success.  I want to thank you for your dedication, your creativity and your willingness to embrace change without which these results would not have been achieved.”


Ford Profits Likely to Top $8 billion

Will big numbers lead to confrontation when workers return to bargaining table?

by on Jan.24, 2011

Ford CEO Alan Mulally is expected to announce total 2010 profits of $8 billion later this week.

Hoping to build its reputation with environmentally-minded motorists, Ford Motor Co. put a spotlight on battery power during this year’s Detroit Auto Show, unveiling models like the plug-in C-Max Energi microvan.  But later this week, Ford CEO Alan Mulally will focus on a different sort of green.

If all holds according to the expectations of Wall Street analysts, the maker is expected to announce that its profits for 2010 came to a total of $8 billion, the biggest number the maker has seen in a decade.  That figure is all the more significant since it came during one of the worst years the industry has experienced since the Great Depression, rather than at a time when U.S. car sales were running at or near record levels.

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But there could be a downside to the big profit.  Ford, like its Detroit Three brethren, is getting ready to return to the bargaining table with the United Autoworkers Union.  The last time they hammered out a contract, in 2007, the union agreed to make major changes, and more followed during the downturn, including the creation of an employee-owned health program and the addition of a two-tier wage structure.