Post by ScottR@KTP on Feb 11, 2011 17:02:42 GMT -5
GM, Chrysler Salaried Workers' Bonuses Said to Reach as Much as 50% of Pay
By Keith Naughton, David Welch and Tim Higgins - Feb 11, 2011 4:27 PM ET
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Business ExchangeBuzz up!DiggPrint Email . 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 employees, said one of the people, who asked not to be named revealing internal plans. Photographer: Jeff Kowalsky/Bloomberg
General Motors Co. and Chrysler Group LLC, which each received government-funded bailouts, may award some managers bonuses of as much as 50 percent of their 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 U.S. salaried employees, said one of the people, who asked not to be named revealing internal plans. Bonuses for Chrysler’s 10,755 salaried workers will average about $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, which is seeking a share of the industry’s growing prosperity. Ford, the only U.S. automaker to avoid bankruptcy in 2009, is expected to pay bonuses equal to 10 percent or more of base pay to some salaried staff, said a person familiar with the plan.
“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 yesterday. “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.”
Tom Wilkinson, a spokesman for GM, declined to comment. Gualberto Ranieri, a Chrysler spokesman, said in an e-mail that “details regarding salaried performance awards are considered confidential.” Marcey Evans, a Ford spokeswoman, said the automaker will pay salaried workers’ bonuses March 10 and wouldn’t reveal details.
Bonus Timing
Chrysler’s bonuses may be paid as soon as today, one of the people said. Bonuses for GM’s salaried workers without management duties may be as low as 5 percent of their annual pay, one of the people said.
GM reorganized in bankruptcy in 2009 with $49.5 billion in government aid, while Chrysler got $12.5 billion in assistance for its reorganization that year. Each is subject to pay restrictions for top executives after receiving funding from the U.S. government’s Troubled Asset Relief Program, which also aided banks.
The U.S. Treasury, which holds 33 percent of GM, would need 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.
GM rose 57 cents, or 1.6 percent, to $36.45 at 4:15 p.m. in composite trading on the New York Stock Exchange. The shares have risen 10 percent since they began trading Nov. 17.
‘Taxpayers First’
“The taxpayers should be repaid before bonuses go out,” Senator Chuck Grassley, an Iowa Republican, said today in an e- mailed statement. “Unfortunately, the Treasury Department never asserted ownership rights. It didn’t put the taxpayers first. As a result, the car companies are allowed to do what they want, including giving lots of executive bonuses. It sends a message that those in charge take shareholders, in this case the taxpayers, for a sucker.”
GM, which earned $4.77 billion in the first three quarters of last year, plans to pay its 53,000 unionized hourly U.S. staff profit-sharing checks of more than $3,000 per worker, two people familiar with the plan have said. That is about 5 percent of an hourly worker’s annual pay, said Sean McAlinden, chief economist for the Center for Automotive Research.
Chrysler Profit-Sharing
Chrysler, which lost $652 million in 2010, said Jan. 31 that it would pay each of its union workers a bonus averaging $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 2010, when the automaker worked on introducing 16 new or refreshed models.
Ford, which posted 2010 net income of $6.56 billion, said it will pay an average of $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.”
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.
“All the sacrifices that our members made to turn these companies around were part of the process that’s really led to this amazing turnaround,” King said in an interview last month. “We want our membership to share in a very meaningful way in the upside of these companies.”
To contact the reporters on this story: Keith Naughton in Detroit at knaughton3@bloomberg.net; David Welch in Detroit at dwelch12@bloomberg.net; Tim Higgins in Detroit at thiggins21@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net
.
By Keith Naughton, David Welch and Tim Higgins - Feb 11, 2011 4:27 PM ET
inShare.1More
Business ExchangeBuzz up!DiggPrint Email . 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 employees, said one of the people, who asked not to be named revealing internal plans. Photographer: Jeff Kowalsky/Bloomberg
General Motors Co. and Chrysler Group LLC, which each received government-funded bailouts, may award some managers bonuses of as much as 50 percent of their 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 U.S. salaried employees, said one of the people, who asked not to be named revealing internal plans. Bonuses for Chrysler’s 10,755 salaried workers will average about $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, which is seeking a share of the industry’s growing prosperity. Ford, the only U.S. automaker to avoid bankruptcy in 2009, is expected to pay bonuses equal to 10 percent or more of base pay to some salaried staff, said a person familiar with the plan.
“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 yesterday. “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.”
Tom Wilkinson, a spokesman for GM, declined to comment. Gualberto Ranieri, a Chrysler spokesman, said in an e-mail that “details regarding salaried performance awards are considered confidential.” Marcey Evans, a Ford spokeswoman, said the automaker will pay salaried workers’ bonuses March 10 and wouldn’t reveal details.
Bonus Timing
Chrysler’s bonuses may be paid as soon as today, one of the people said. Bonuses for GM’s salaried workers without management duties may be as low as 5 percent of their annual pay, one of the people said.
GM reorganized in bankruptcy in 2009 with $49.5 billion in government aid, while Chrysler got $12.5 billion in assistance for its reorganization that year. Each is subject to pay restrictions for top executives after receiving funding from the U.S. government’s Troubled Asset Relief Program, which also aided banks.
The U.S. Treasury, which holds 33 percent of GM, would need 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.
GM rose 57 cents, or 1.6 percent, to $36.45 at 4:15 p.m. in composite trading on the New York Stock Exchange. The shares have risen 10 percent since they began trading Nov. 17.
‘Taxpayers First’
“The taxpayers should be repaid before bonuses go out,” Senator Chuck Grassley, an Iowa Republican, said today in an e- mailed statement. “Unfortunately, the Treasury Department never asserted ownership rights. It didn’t put the taxpayers first. As a result, the car companies are allowed to do what they want, including giving lots of executive bonuses. It sends a message that those in charge take shareholders, in this case the taxpayers, for a sucker.”
GM, which earned $4.77 billion in the first three quarters of last year, plans to pay its 53,000 unionized hourly U.S. staff profit-sharing checks of more than $3,000 per worker, two people familiar with the plan have said. That is about 5 percent of an hourly worker’s annual pay, said Sean McAlinden, chief economist for the Center for Automotive Research.
Chrysler Profit-Sharing
Chrysler, which lost $652 million in 2010, said Jan. 31 that it would pay each of its union workers a bonus averaging $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 2010, when the automaker worked on introducing 16 new or refreshed models.
Ford, which posted 2010 net income of $6.56 billion, said it will pay an average of $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.”
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.
“All the sacrifices that our members made to turn these companies around were part of the process that’s really led to this amazing turnaround,” King said in an interview last month. “We want our membership to share in a very meaningful way in the upside of these companies.”
To contact the reporters on this story: Keith Naughton in Detroit at knaughton3@bloomberg.net; David Welch in Detroit at dwelch12@bloomberg.net; Tim Higgins in Detroit at thiggins21@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net
.
