Workers on and off Detroit's assembly lines will be seeing bonuses this year.
Chrysler Group and General Motors are using bonuses to reward salaried employees who survived the long, bitter recession.
Almost 11,000 salaried workers at Chrysler will receive an average bonus of $10,000, according to various reports. But the planned handout may touch off a rift in the company’s ranks, according to employees familiar with the plans, who indicate many employees believe the rewards are inherently unfair and biased against blue-collar workers.
Meanwhile, GM’s 26,000 white-collar workers will also see performance bonuses this year, the automaker has acknowledged. While GM hasn’t released its final financial report for 2010, the maker also appears to pay its 53,000 U.S. unionized hourly employees profit-sharing checks amounting to $3,000.
Ford has been relatively cautious on salaried pay, limiting raises but promising merit bonuses equal to 10% of base pay to select salaried employees.
Chrysler’s bonuses for its 10,755 salaried workers will average about $10,000. Some employees who are not subject to pay restrictions could net as much as half their salary, according to Bloomberg.
However, top executives at GM and Chrysler remain subject to pay restrictions since receiving government-funded bailouts in 2009. Ford executives are eligible for bonuses but the company’s heavy debt is expected to limit such rewards, Ford officials have suggested.
The bonuses also come amid a hiring drive by both companies that has actually left engineering talent in short supply in Southeast Michigan. Suburban Detroit communities organizing a job fair at Oakland University, later this month, have actually begun sending appeals out of state in a bid to entice engineers back to the Detroit area.
After years of downsizing and cutbacks, Chrysler hired nearly 1,000 engineers and contract employees last year and expects to hire another 1,000 salaried employees, mostly engineers, again this years. GM also announced plans to hire another 2,000 engineers over the next two years.
Nevertheless, bonuses remain a touchy subject for both GM and Chrysler. Though it maintains it will report a profit, GM hasn’t released its final financial statement for 2010.
Chrysler, however, had a $199 net loss for the fourth quarter, while losses totaled $652 million for the fourth quarter. Chrysler’s net revenues decreased 2.3 percent to $10.76 billion as the company prepared to launch 11 new or substantially change vehicles during the quarter.
“As Chrysler Group’s brand displays at the Detroit auto show confirmed, the company has lived up to its promise to launch 16 all-new or significantly refreshed vehicles in the past 12 months,” Marchionne noted. He has also admitted that the drive has taken its toll on Chrysler’s senior staffers, who are expected to work seven days a week to keep up with Marchionne’s ambitious plans to rebuild the company.
Chrysler also posted an operating profit of $198 million in the fourth quarter and $763 million for the total year as the company regained its footing and improved both its model mix and pricing. Greater efficiency and improved quality also boosted Chrysler’s operating performance, Marchionne said.