GM, Ford workers to see big profit-sharing checks

Business in North America has been very good for General Motors and Ford. As a result, hourly workers at GM can expect as much as $7K in March. Ford workers may get more than $8K.

By Charley Blaine Dec 26, 2012 3:13PM
© Don Mason, Blend Images, CorbisIt's a good year to be a U.S. auto worker.

The United Auto Workers has told its members at General Motors (GM) and Ford Motor (F) to expect big profit-sharing checks early next year. According to The Wall Street Journal, Ford workers can expect $8,000 each. GM workers can expect as much as $7,000.

Details were not available for workers at Chrysler Group.

Last year, GM paid out $7,000 in profit-sharing, while Ford awarded about $6,200. About 26,000 Chrysler workers received around $1,500 each in profit-sharing checks.

For the GM and Ford workers, the profit-sharing checks will represent 11% to 14% of the typical autoworker's annual wage of about $58,500. For entry-level workers, it's a much bigger percentage of their wages.

The profit-sharing checks are a sign of how far the domestic auto industry has come back from the 2008-2009 financial crisis. GM and Chrysler were forced into Chapter 11 bankruptcy to reorganize their finances. Thousands of workers lost their jobs.

The UAW agreed to cost concessions at Ford, GM and Chrysler. The key provision was a new $14 hourly wage for entry-level workers -- half of what veteran workers had been making. The union also gave up some health benefits and cost-of-living pay adjustments, with profit sharing negotiated to help offset the cuts.

Profit-sharing bonuses for GM and Ford workers are based on how much operating profit the two companies make in North America. In the first three quarters of 2012, GM's North American unit made $5.55 billion, while Ford's North American business earned $6.47 billion. Both are expected to post substantial profits for the fourth quarter, too. Barclays forecasts Ford will generate another $1.89 billion in North America for the quarter.
Because of that success, about 50,000 GM hourly employees will likely receive payments ranging between $5,500 and $7,000 each, The Journal said. Ford's eligible hourly workers, estimated at 44,000, could get paid more than $8,000 each. The estimates are based on terms of their UAW contracts that essentially have eligible workers receiving $1 extra for every $1 million in operating profit Ford or GM generates in North America.

The final amounts won't be known until both companies close out the fourth quarter and announce their financial results. Checks would go out in March.

Edmunds.com is forecasting that automakers will share a 1.36 million annualized sales rate for December, up 9.6% from a year ago and up 19.1% from November. For the year, the industry will probably sell 14.5 million cars and light trucks, up 13.5% from 2011 and the best performance since 2007.

The health of the North American business is in sharp contrast to heavy losses the companies are suffering in Europe.

Sales growth may soften in 2013, Edmunds says.

GM shares were up 6 cents to $27.72 at 1:15 p.m. ET on Wednesday and are up nearly 37% in 2012. Ford shares were up 12 cents to $12.52 and are up nearly 17%.

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18Comments
Dec 26, 2012 4:34PM
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But they took the retirees money away from them.
Jan 10, 2013 3:31PM
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Just a friendly reminder to everyone upset with the bonuses... Ford didn't take a single dollar of bailout money.  If you want to be angry, be angry at the companies that took the bailout, and show it when you go car shopping.
Jan 19, 2013 2:51AM
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Ford made a great comeback, hard union workers paying their dues and reaping the benefits.  
Dec 26, 2012 7:48PM
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As  a couple who  gets a pension from  Ford Motor,  my husband worked hard from 1969, and went on strike to negotiate  for benefits!!  The union and Ford have forgotten these workers!!  The workers who are fortunate to be working now, have gotten bonuses and profit sharing, thanks to those workers who made the company  what it has become!  The union now belongs to Ford Motor Co!! Retirees get nothing, Shame on you both, union and Ford!  
Dec 27, 2012 1:42PM
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It's gonna get worse before it gets better!
Dec 26, 2012 6:06PM
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What about all the bailout money and now enough money to give each workers 1,000's Hmmm whats wrong here
Dec 26, 2012 6:49PM
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Chrysler workers have to get a BRONZE pillar in the FIAT scheme of things ! only 4 plants have it ! All the rest get nothing. Out of every Chrysler plant in the USA Mexico and Canada..And with the new RIGHT TO WORK state in MICHIGAN everyone will be making less ! Because the union benefits are given to all workers ! The ones who pay dues ,  and to the" useless ones that DON'T"... !!! Pay union dues ! Its federal law !!! ..So see right to work is only right to make less... Look at the states that have right to work for over 20 yrs .. They all pay less than Michigan does today !!! But not for long ! We will here now be known as MISSippiagan .. And look at their unemployment and state wage ... Only in America the USA land of the FREE?? Home of the TRULY STUPID....THANKS TO THE GOP IN MICHIGAN... Selling America AND MICHIGAN out...LOL Lets see Toyota build a plant in Michigan >>> I might buy it LMFAO REAL HARD GOP... Until then go screw yourselves. USELESS REPUBLICANS...In MICHIGAN... I pay the highest taxes in the country !!! Who says repukes don't raise taxes   . BTW Chrysler paid their SO CALLED BAILOUT  money in FULL... Thanks to the UAW....Off our backs , and the retirees...There are less than 18,000 UAW TEAR 1 wagers  left in Chrysler . Out of 200,000 world wide. I think the GOP smashed the UAW good enough.. LOL Healthcare for retirees off their backs since 2009 i.e.V.E.B.A. . No more defined pensions for tear 2 wagers , or healthcare when they retire. No VEBA for them . Yep I am one of the last of the BIG THREE auto workers.. Truly. Sad...Day in America..OH IM SORRY ITS MICHASSIPPI .. thanks for the new name ... iT FITS WITH THE RIGHT TO MAKE LESS LAW IN MICHIGAN... << BROUGHT TO US BY THE GOP... Absolute power corrupts absolutely....Here in MICHASSIPPI...
Dec 27, 2012 7:50AM
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How nice that the american people who had no say in bailing out GM or Ford when they were about to go under are now going to give GM and Ford workers a huge bonus this year, because that is our hard earned money being paid to these employees no matter how you look at it!. Where are our bonuses,  the hard working american's who held onto their jobs, made their tax payments to the government so they could bail out these lying cheating conniving companies? America, isn't it time we take back our country, throw out the politicians who are only watching out for their rear ends! When do we stop being so complacent and instead step up and take back our country from the politicians and corporate america who have done nothing but run this country into the poor house while they walk away with their trillions of dollars and we are left holding the DEBT!
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