GM and Ford Workers Set for Largest Profit-Sharing Payouts Since Crisis
Nearly 100,000 hourly employees at GM and Ford in North America are due profit-sharing cheques of up to $8,000 each, reflecting the carmakers’ strong 2012 financial performance.
Hourly workers at General Motors and Ford in North America are set to receive some of the largest profit-sharing payments since the financial crisis, with cheques of up to $8,000 expected in early 2013. The United Auto Workers (UAW) union informed members that Ford’s payout will top $8,000 per worker, while GM employees can expect around $7,000 each. These figures reflect the carmakers’ strong North American results for 2012, and mark a significant milestone in the recovery of the US auto industry.
Biggest Profit-Sharing Cheques Since the Crisis
Details of the Profit-Sharing Scheme
The profit-sharing scheme, negotiated by the UAW, ties annual bonuses to the companies’ North American operating profits. For Ford, the first three quarters of 2012 brought $6.47 billion in profit from its North American operations. GM’s equivalent figure reached $5.55 billion. Both companies were expected to post further gains in the final quarter, setting the stage for these record payments. Nearly 50,000 GM hourly employees and 44,000 Ford workers will benefit from the scheme, with payments ranging between $5,500 and $8,000 depending on the company and final profit figures.
For workers, the cheques represent a substantial share of annual pay. The UAW said that Ford’s payout would amount to more than 13% of a typical hourly wage, which is around $58,500 per year. GM’s payment is close behind, at roughly 12%. In both cases, the 2013 cheques exceed those of the previous year, when Ford paid out $6,200 per worker and GM nearly $7,000.
| Company | 2011 Payment | 2012 Payment (expected) | Number of Eligible Workers |
|---|---|---|---|
| Ford | $6,200 | >$8,000 | 44,000 |
| GM | Nearly $7,000 | Around $7,000 | ~50,000 |
Industry Recovery Since the Financial Crisis
The scale of these bonuses marks a clear shift from the crisis years of 2008 and 2009, when GM and Chrysler filed for bankruptcy and tens of thousands of jobs were lost. During that period, the US auto industry was in severe distress, with widespread layoffs and plant closures. The robust profit-sharing cheques now being issued are a direct result of Detroit manufacturers’ return to profitability in their home market, reflecting how far the sector has come since those challenging years.
Industry analysts have highlighted the strong US sales environment in late 2012 as a major factor behind these improved results. According to predictions from Edmunds.com, automakers were on track for a 1.36 million annualised sales rate for the month, an increase of 9.6% compared with the previous year and 19.1% from November. This recovery in demand has played a key role in lifting North American profits for both Ford and GM, making such large payouts possible.
Impact on Workers and Future Negotiations
For many workers, these cheques offer significant financial relief and are a tangible sign of the companies’ improved fortunes. The payments, which represent a notable portion of annual earnings, are among the largest seen since before the financial crisis. Ford’s 44,000 eligible hourly workers will each receive more than $8,000 in early 2013, the highest figure since before the downturn, while nearly 50,000 GM employees will also benefit from substantial payouts.
The record cheques come as UAW workers prepare for upcoming wage negotiations with the Detroit Three automakers. While profit-sharing has provided substantial one-off payments, union members continue to press for improvements to base pay and benefits. The size of this year’s payouts is likely to become a key reference point in those discussions, as workers weigh the value of bonuses against the need for more predictable income and long-term job security.
Broader Consequences for the Auto Industry
The large profit-sharing cheques at Ford and GM signal a broader recovery for the auto industry in North America. After years of uncertainty and restructuring, the ability of these companies to deliver strong profits and share them with their workers demonstrates renewed stability. This, in turn, could influence labour relations, wage expectations, and future investment decisions across the sector. As the industry continues to evolve, the experiences of Ford and GM workers may shape the approach taken by other automakers and unions in the years ahead.
