GM’s hourly workers will receive their largest profit-sharing checks in history, amounting to $12,750 per worker, during February 2023, according to financial information released on January 31st, 2023. The payment will be added to eligible workers’ paychecks on February 24th, 2023.
Approximately 42,300 employees qualify to receive the payment. A 2019 agreement between the United Auto Workers (UAW) and GM saw the latter agree to pay hourly workers $1,000 in profit-sharing for every $1 billion in profits General Motors earns within the North American market. The company’s nearly $13 billion of earnings in North America during 2022 led to the $12,750 payments now expected.
A profit-sharing windfall of this record-breaking size is only possible because of UAW negotiations in 2019. At that time, the union successfully urged GM to remove a $12,000 upper limit on profit-sharing payments to employees previously in effect, The Detroit News reports.
GM has repeatedly made profit-sharing payments to its workers over the years in accordance with its agreements. In February 2022, it handed out payments of $10,250 to each worker in spite of business disruption from the microchip shortage and other supply chain problems.
The profit-sharing amount was up from the $9,000 paid to each eligible employee in early 2021. As GM spokesman Dan Flores pointed out, the automaker’s workers “have earned more than $72,000 each in profit-sharing since 2015” as of 2022, a figure soon to climb to over $84,750 with the upcoming round of payments.
GM also paid sizeable bonuses to workers in the pre-pandemic days. Salaried, white-collar employees earning approximately $100,000 per year got an $11,400 bonus in 2020, based off the company’s 2019 profits. Unionized workers received $11,750 profit-sharing bonuses in 2018 following $12,000 bonuses in 2017.
Robust 2015 profits gave UAW workers $11,000 bonuses in February 2016, after getting $9,000 apiece the previous year. GM originally negotiated the system to avoid growing fixed wage costs, which would result from wage hikes in contracts. The profit-sharing model is intended to give workers a stake in the company’s success, as higher production and sales translate to higher bonuses for them.
GM CEO Mary Barra stated in her January 31st, 2023 fourth-quarter (Q4) letter to shareholders that “our eligible U.S. hourly employees earned record profit sharing totaling $500 million, which brings the three-year total to $1.2 billion.” She also remarked that the workers’ “hard work helped us deliver industry-leading initial quality and meet strong customer demand.”