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52k workers to receive $12,000 each in a profit sharing payout
By Kalea Hall
LORDSTOWN
Record sales and record earnings have led to a record profit-sharing payout for 52,000 General Motors U.S. employees.
Eligible employees will receive up to $12,000 in profit sharing, GM said Tuesday.
The Detroit automaker reported North America adjusted earnings of $12 billion in 2016, up from $11 billion in 2015.
For every $1 billion the company makes in North America, hourly employees make $1,000 in profit sharing, according to the United Auto Workers/GM agreement.
The amount workers receive is dependent on how many hours they’ve worked. To receive the full amount, an employee had to work 1,850 hours last year. Anything less than that, and the amount will be prorated.
A majority of more than 4,000 people who worked at the GM Lordstown Assembly Complex will receive a $12,000 check from GM. Some of those workers are laid off after the plant lost its third shift this year because of a lack of demand for small cars such as the Chevrolet Cruze produced at the plant.
On the fabrication side of the plant, a majority of 1,300 workers will receive a profit-share check.
On the assembly side, a majority of 3,000 workers will receive a profit-share check.
“It’s a morale booster,” said Robert Morales, president of United Auto Workers Local 1714, who represents the fabrication side of the plant. “It will give the members a sense of accomplishment for what was achieved by the company and the UAW. A lot of hard work and effort was put into today for it to be a success.”
GM’s overall yearly revenue was $166.4 billion, up 9.2 percent from a year ago. Net income was $9.4 billion, down 2.7 percent from a year ago. Adjusted earnings were $12.5 billion, up 15.9 percent.
“It shows what a great job the company is doing,” said Glenn Johnson, president of UAW Local 1112, who represents the assembly side of the plant. “It’s a great American success story ... each one of our team members from the shop floor all the way up plays an integral part in that success.”
In the fourth quarter, the company reported revenue of $43.9 billion, up 10.8 percent year-over-year. Net income was down 70.7 percent year-over-year to $1.8 billion for the quarter. Adjusted earnings were $2.4 billion during the fourth quarter, down 13.7 percent from one year ago.
In North America, the company reported record revenue of $119 billion for the year.
The company’s Europe and South America results were not as stellar as North America’s. In Europe, the company reported an adjusted income loss of $300 million and a loss of $400 million in South America in 2016.
Global sales came in at a record 10 million, up 1.2 percent from 2015.
In the U.S., GM sold 3.04 million vehicles during the year and increased its retail share by 0.5 percentage points, more than any other automaker.
Autotrader senior analyst Michelle Krebs remembers back in 2009 when the future of GM looked grim.
“In 2009, we weren’t sure if they would exist,” Krebs said. “It was a surreal time.”
After the government stepped in to help GM with the bailout, GM stepped up and improved on quality, design and engineering, Krebs said.
GM also has remained disciplined in watching supply and demand levels and is focused on getting the more profitable retail sales rather than fleet sales.
Krebs expects this year to be another solid year for GM. The auto industry just came off of its seventh year of growth with 17.5 million sales. Analysts expect sales to plateau this year and come in between 17.1 million and 17.3 million.
“It will be a little below last year, but still relatively strong,” Krebs said.
Analysts see no end in sight for the trend of crossovers and sport utility vehicles – a trend that has led automakers to lower inventory levels of small cars. In November, GM announced it would cut the third shift at the Lordstown plant because of the trend away from compact cars. On the fabrication side, about 235 workers were laid off; on the assembly side, more than 600 were laid off indefinitely in January.
GM plans to release new, trending crossovers and sport utility vehicles including the 2018 Chevrolet Equinox.
“GM has the right products coming into the market this year,” she said.