GM expects union bonuses of $4,000

By Craig Trudell and David Welch
Bloomberg News / February 15, 2011

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SOUTHFIELD, Mich. — General Motors said yesterday it expects to give unionized US 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 company said yesterday 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,’’ said Robinson, also a former general counsel at auto-parts maker Delphi Corp.

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.

“We are beginning to see that the hard work and dedication of this team is helping to create a healthier GM, which benefits employees, our customers, and the many others who depend on our success,’’ Joe Ashton, UAW vice president, and Cathy Clegg, vice president of labor relations for GM, said in the letter.

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 yesterday. Less than 1 percent of the company’s managers had target bonuses of at least 50 percent of their salary, the company said.

Ford will pay its 40,600 US hourly employees profit sharing checks averaging $5,000, the Dearborn, Mich., automaker said after announcing 2010 net income of $6.56 billion, the most since 1999. Chrysler in Auburn Hills, Mich., which had a $652 million loss last year, said unionized worker bonuses will average $750.