General Motors Co (GM) and Chrysler Group LLC, which each received US government-funded bailouts, may award some managers bonuses of as much as 50 percent of their annual salary, said four people familiar with the plans.
GM plans to pay bonuses to most managers equal to 15 percent to 20 percent of their annual salary and as high as 50 percent to less than 1 percent of its 26,000 US salaried employees, said one of the people, who asked not to be named revealing internal plans.
50% OF SALARY
Bonuses for Chrysler’s 10,755 salaried workers will average about US$10,000, with a small group getting as much as half of their salary, one of the people said.
The payouts come as GM, Chrysler and Ford Motor Co prepare for contract talks this year with the United Auto Workers (UAW) union, which is seeking a share of the industry’s growing prosperity. Ford, the only US automaker to avoid bankruptcy in 2009, is expected to pay bonuses equal to 10 percent or more of base pay to some salaried staff, a person familiar with the plan said.
ANGRY UNION
“The union is going to be very angry about this,” Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts, said in an interview on Thursday. “If these kinds of bonuses are paid to salaried workers, then the union’s demands will increase, knowing management can’t claim an inability to pay.”
GM, which earned US$4.77 billion in the first three quarters of last year, plans to pay its 53,000 unionized hourly US staff profit-sharing checks of more than US$3,000 per worker, two people familiar with the plan have said. That is about 5 percent of an hourly worker’s annual pay, Center for Automotive Research chief economist Sean McAlinden said.
Chrysler, which lost US$652 million last year, said on Jan. 31 that it would pay each of its union workers a bonus averaging US$750. That is about 1.3 percent of an hourly UAW worker’s annual pay. Chrysler chief executive officer Sergio Marchionne said that all eligible employees would receive a performance bonus for last year, when the automaker worked on introducing 16 new or refreshed models.
Ford, which posted a net income of US$6.56 billion last year, said it will pay an average of US$5,000 to each of its 40,600 hourly workers, or about 8.3 percent of their base pay.
“If bonuses are a lot more on average for all of salaried workers, the UAW workers will be cheesed off and want a bigger signing bonus this fall,” McAlinden said in an interview yesterday. “It’s going to be tense down at the plant.”
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