GM Gives Holiday Profit Sharing Bonus' To Workers

GM to offer bigger payouts than Ford and DaimlerChrysler

November 25, 2002

ASSOCIATED PRESS

Sales of American automobiles are strong, but General Motors Corp. is the only Detroit auto maker earning enough to offer its workers holiday bonuses, analysts say.

Meanwhile, Ford Motor Co. and DaimlerChrysler AG struggling to break even.

"With profits at Detroit automakers being down as much as they are, there may be a small bonus for a small number of employees," Richard Hilgert, an analyst with Fahnestock and Co. in Detroit, said.

That's not the case for some foreign automakers. Honda, Toyota, BMW and other transplanted automakers expect to pay big bonuses.

Slow sales by Michigan's automakers could affect retailers and the state's tax coffers. The state treats payouts as income and takes a 4.1-percent cut.

"The impact can be huge," said Sean McAlinden, director of economic forecasting for the Center for Automotive Research in Ann Arbor.

The checks, usually distributed in March, don't directly effect holiday shopping, but they can contribute to the economy through travel purchases, McAlinden said.

Ford is expected to break even or post a small profit for 2002, but third-quarter losses of $326 million have virtually ended prospects for blue-collar bonuses.

"There's no chance at all for Ford," McAlinden said. "Even if they break even it won't qualify for profit sharing."

For Ford workers like Rocky Comito, it would be the second holiday season in a row without a bonus.

"Looking at the stock market, I'm at a mindset of not expecting anything," said Comito, president of UAW Local 862, which represents workers at Ford's Louisville, Ky., truck plant.

Ford workers received an average $8,000 profit-sharing bonus as recently as 2000, and $6,700 in 2001.

But they weren't alone in 2001. GM and Crysler didn't pay bonuses in 2001, either.

Bonuses for Ford executives also were withheld this year.

GM, on the other hand has seen North American profits climb to $2.4 billion this year, up from $1.1 billion in the first nine months of 2001.

McAlinden said GM workers could receive bonuses of between $800 to $1,200.

Workers for DaimlerChrysler AG's Chrysler Group, McAlinden said, could receive a few hundred dollars or nothing at all.

The 9,500 workers at U.S. plants operated by Honda Motor Co., however, were told this week they'll receive an average of $4,639.

Workers at German automaker BMW AG's South Carolina assembly plant can expect average year-end bonuses of about $4,000, spokesman Bobby Hitt said.

Comito said it's frustrating to think about money he'll probably never see.

"I'd rather expect nothing than hope for something and not get it," he said.