General Motors announced a record profit-sharing check for its unionized employees in the wake of lower overall net income from the ignition switch scandal that has cost the automaker millions of dollars. GM employees were grateful, and frankly shocked when they received their latest profit-sharing checks.
“This is much more than we were expecting. Everyone seemed to be upbeat about it,” said Tim Shoup, a 61-year-old worker at General Motors’ Flint Truck assembly plant. “I think most of us were thinking it would be around $5,000 or $5,500.” Shoup says he foresees a long overdue vacation this summer with the help of this money.
The profit-sharing is a crucial payment many UAW workers await since workers like Shoup, who were hired before 2007, haven’t seen a base-wage increase in eight years. Worker hired after 2007 start at a lower wage, but have seen small incremental increases in their hourly wages.
Kristen Dziczek, who runs the industry and labor group at the Ann Arbor-based Center for Automotive Research, said that during good years of operations the checks make a significant impact and supplement workers’ wages. But she notes that in the thirty years since the UAW accepted profit-sharing there has been twelve years where GM payed nothing at all.
Other workers like Anthony Kotlarcyzk, a 56 year old pipe fitter at the Detroit-Hamtramck assembly, plan on paying off debt, planning a vacation and buffering their 401(k)s.
“I’ll probably put some of it into my 401(k). My daughter just graduated from Wayne State with a degree in psychology and some of it may go to help pay off her loans. My wife may want to take a vacation. It’s not my money, it’s ours.”
GM’s Chief Financial Officer Chuck Stevens said no set formula was used to calculate the profit-sharing sum, but commented saying the company wanted to reward the “significant support and hard work” of its manufacturing team.