General Motors announced that union workers achieved vehicle-quality targets and will receive about $12 million in bonuses.
The announcement comes 10 weeks after the automaker ratified a new labor contract with the United Auto Workers (UAW). Each eligible worker will receive a $250 bonus on December 16, Kim Carpenter, a GM spokeswoman was quoted as saying by Bloomberg. She added that the vast majority of the automaker’s 48,500 UAW-represented workers are eligible.
Annual quality bonuses are awarded only if GM meets the target for incidents per 1,000 vehicles that have been in service for two months. “We were 98 percent of our target, and so the payout is $250 per eligible UAW employee,” Carpenter said.
According to GM CEO Dan Akerson, the new four-year labor contract keeps the company competitive by only marginally boosting its $5 billion annual labor expense. According to the agreement, senior workers won’t receive a base wage increase and some of the retributions will be based on the company’s profitability.
Entry-level workers received wage increases, $5,000 signing bonuses and other benefits estimated to cost GM $675 million through 2013. The automaker estimates it will save $460 million to partially offset those payouts.