SOUTHFIELD, Mich. - General Motors said Monday it expects to give unionized U.S. hourly employees profit-sharing checks averaging at least $4,000 as it prepares to negotiate a labor contract this year.
The payout is more than double the previous record for bonuses paid to GM’s hourly workers, the Detroit-based company said Monday in an e-mailed statement. GM said the previous record for its hourly workers’ checks was an average $1,775, in 1999.
GM, Ford and Chrysler are preparing for contract talks this year with the United Auto Workers as the union seeks a share of the industry’s prosperity. GM, which earned $4.77 billion in the first three quarters of last year, wants to avoid “lockstep” annual raises to all employees and instead pay bonuses tied to profitability, said Logan Robinson, a law professor at the University of Detroit Mercy.
“A nice fat check will make the workers sympathetic to a plan like that,” Robinson, also a former general counsel at auto-parts maker Delphi Corp., said in an interview.
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The exact payout for GM’s 45,000 eligible employees will be disclosed during the company’s earnings release in late February, the automaker said.
The payouts to union workers are “a good example of how we are sharing in the success” of GM, the company and the UAW said in a joint letter distributed to the automaker’s plants.
About 96 percent of the company’s 28,000 salaried workers have a target bonus range equal to 4 percent to 16 percent of their annual salary, GM said Monday. Less than 1 percent of the company’s managers had target bonuses of at least 50 percent of their salary, the company said.
Because GM exceeded its targets for operating cash flow, earnings before interest and taxes, and global market share, the actual bonuses may be 1.45 times the employees’ targeted ranges, GM said. That means bonuses for top performers may exceed 72 percent of their salary, according to the statement.
Chief Executive Officer Dan Akerson said in December at the Economic Club of Washington that salaried workers would forgo raises for 2010.
Ford will pay its 40,600 U.S. hourly employees profit sharing checks averaging $5,000, the Dearborn, Michigan-based automaker said after announcing 2010 net income of $6.56 billion, the most since 1999. Auburn Hills, Michigan-based Chrysler, which had a $652 million loss last year, said unionized worker bonuses will average $750.
GM reorganized in bankruptcy in 2009 with $49.5 billion in government aid. The U.S. Treasury, which holds 33 percent of GM, needs to sell its remaining 500 million shares for an average of $53.07 to break even, according to a GM regulatory filing and data compiled by Bloomberg.
UAW President Bob King has said he aims to recover some of the $7,000 to $30,000 in concessions each worker gave up since 2005 to help the U.S. automakers survive. The union surrendered raises, bonuses and cost-of-living adjustments. The UAW also agreed to a two-tier wage system in which new hires earn about $14 an hour, half the amount paid to senior production workers.