Workers’ reward: $9,000 payment

4,500 employees at GM plant to benefit from profit sharing

Staff/wire report

LORDSTOWN

The year has started out positive for workers at the Lordstown General Motors plant where the automaker’s top-selling Cruze is built.

On Wednesday, GM announced it turned a $2.8 billion profit in 2014 and with that, up to $9,000 in profit-sharing payments for more than 48,000 workers, including about 4,500 employees at the Lordstown plant.

“GM understands they work their tails off,” said Glenn Johnson, president of the United Auto Workers Local 1112. “In turn they have been rewarded.”

Johnson, who spoke for approximately 3,000 workers he represents in the Lords- town East Complex assembly plant, said after the profit-sharing formula was renegotiated in 2011, workers were able to receive $7,000 in profit-sharing payments.

“But because of the GM’s ability to do the right thing by workers,” they received a $2,000 performance bonus, Johnson said.

“I really believe GM, in its infinite wisdom, knew the workers had nothing to do with recalls,” he said.

Yet those workers have helped the company’s profits, he said.

This news came a day after it was released that the Cruze broke January sales records and continued its sales momentum from 2014 — the highest sales year for the Cruze yet.

Robert Morales, president of the Local 1714, who represents the metal fabrication plant workers could not be reached to comment late Wednesday.

If it weren’t for those recalls, 2014 would have been one of GM’s greatest years.

Even with $2.8 billion in pretax costs to fix more than 42 million recalled vehicles worldwide and $400 million set aside for death and injury claims, GM still managed to turn a $2.8 billion profit. It plans to raise the quarterly dividend.

Except for the recalls, most of the stars lined up last year for the Detroit automaker. Gas prices dropped more than a buck to $2.26 per gallon. The U.S. economy gained steam. Cheap credit was abundant.

Combined, they sent buyers to GM’s newly redesigned and lucrative pickup trucks and large SUVs in North America, the company’s most-profitable market.

At the same time, chief competitor Ford’s truck plants were down much of the year while it switched to a new pickup with a risky aluminum body. Sales in China grew faster than the market. Global sales rose 2 percent to 9.9 million vehicles, a record.

Things were so good, GM plans to raise its dividend 20 percent next quarter, to 36 cents, pending board approval. And the company said the dividend could go even higher this year once GM gets a better handle on recall costs.

Yes, there was trouble in Europe, Russia and South America, but by and large, GM had a good year.

GM shares rose 5.4 percent Wednesday. The gain could be the largest one-day increase since July 3, 2012, when the stock closed up 5.6 percent.

For the full year, GM’s net income fell 26 percent, from $3.8 billion in 2013. The company earned $1.65 per share. Excluding one-time items, GM earned $3.05 per share, beating Wall Street’s expectation of $2.64, according to FactSet. Revenue rose slightly to $155.9 billion.

“We’re really going to carry the positive momentum into 2015,” Chief Financial Officer Chuck Stevens said.