General Motors hourly workers will receive a record $12,000 bonus checks after Detroit automaker profited $12 billion in 2016 in North America. The profit sharing bonus checks workers will be receiving is the result of the United Automobile Workers (UAW) union negotiation with the company back in 2011.
Around 52,000 hourly workers will be raking in their $12,000 profit sharing bonus checks, a record high. USA Today reports that last year, $11,000 bonus checks were given to the hourly workers after the General Motors profited $11 billion in North America.
— General Motors (@GM) February 1, 2017
In order to award such bonuses, workers need to have at least 35 working hours per week during the year. Also, the formula adopted by the company allows workers to receive $1000 for every $1 billion annual profit, pre-tax, in North America. This is part of the contract negotiated by UAW in 2011.
Cindy Estrada, UAW VP and also head of the union's GM department, said that the workers earned their bonus checks. "Today's performance bonus announcement of a maximum of $12,000 each rewards our members' dedication and commitment to building some of the most popular and high-quality vehicles in the world. They deserve every penny of that collectively bargained bonus check," said Estrada as reported by Forbes.
First negotiated in 1982, profit sharing's formula over the years has been simplified and is based on company profits prior to taxes and interest in the North American region. In fact, GM's bonus checks are the first payout under the 2015 contract.
Meanwhile, Ford will also grant their 56,000 workers with an average of $9000 after earning $9 billion in North America in 2016. Also, Fiat Chrysler Automobiles follows suit as they too will pay around 40,000 workers $5000 after their $5.1 billion profit in North America.
General Motors Financial Officer Chuck Stevens said that they expect to see another strong year in 2017. They also will carefully manage their inventory.