General Motors factory workers will get a record amount in profit-sharing checks this year. The automaker's 48,000 UAW hourly workers will get at least $4,000. That's more than twice the company's previous record for hourly worker profit-sharing - $1,775 in 1999.
General Motors says most of its 26,000 white-collar workers will get bonus checks. The automaker says the bonuses will be between 4 and 16 percent of their base salaries. The Associated Press reports:
The company says in a statement Thursday that bonuses will be based on the performance of the worker and the company. GM made $4.2 billion in the first three quarters of last year and is expected to post a fourth-quarter profit shortly. The bonuses come just 19 months after GM needed a $49.5 billion government bailout to make it through bankruptcy protection.
The company says that more than 96 percent of the salaried workers will get bonuses of 4 to 16 percent of their base pay. Fewer than 1 percent will get 50 percent or more.
General Motors Co. is planning to pay its hourly workers in the U.S. at least $3,000 each in profit-sharing payouts, the largest amount ever, after the company's return to profitability in 2010, people familiar with the matter said...The auto maker is trying to tow the line between fiscal prudence and expectations that it will share recent gains with workers as the company heads into labor negotiations with the United Auto Workers.
Other U.S. automakers are also sharing the wealth.
Ford Motor Company paid hourly workers more than $5,000, "more than the company was required to pay under the profit-sharing formula in its contract with the UAW," according to the Wall Street Journal.
And Chrysler gave their workers $750 despite the company's losses in 2010.
The Detroit Free Press reports that the checks are expected to be handed out in the months ahead, and the size of the checks could help the automaker in its negotiation with the United Auto Workers union. From the Freep:
The Detroit Three, which will negotiate new labor contracts with the UAW this year, may be giving higher-than-required payments to autoworkers as part of a strategy to convince the rank and file to keep labor costs flat in return for bigger profit sharing in the future, labor experts previously told the Free Press.
Detroit automakers are preparing to send bonuses to workers around the region. Even some temporary workers will get a share of growing profits. Terri Houldieson is technically a temp worker, or a "long-term supplemental employee." But she’ll still get a piece of Ford’s $6.6 billion profit from last year.
Workers like Houldieson should receive, on average, about $2,000 each compared to the $5,000 for regular employees.
"We’ve all put work in and it just shows that they respect us too. Kind of like a pat on the back," says Houldieson.
Ford employs a couple thousand long term temps and most work at assembly plants in Chicago and the Twin Cities.
Houldieson said she’ll buy some new clothes for her two boys, and maybe some expensive shoes to protect her feet during those long hours at the plant.
General Motors is jumping back into advertising during the Superbowl. GM will likely spend $15,000,000 on ads focusing on its Chevrolet brand.
Many car companies like Ford Motor Company are using social media and Internet-based advertising more and more. But analyst Ed Kim of AutoPacific says Superbowl ads still generate a lot more buzz.
"Any automaker advertising during the Superbowl is certainly going to have a whole lot of exposure to a whole lot of people all across America," says Kim.
Kim says GM's current marketing czar, Joel Ewanick, used to work for Hyundai, so he has experience using the Superbowl to improve a car company's image and sales. At the peak of the recession, Hyundai began a highly successful campaign which allowed people to return Hyundai cars if they lost their jobs. Kim says Hyundai used the campaign to good effect in its Superbowl ads.
GM did not advertise during the Superbowl last year and the year before. The automaker does plan a social media campaign in conjunction with the Superbowl. GM will release its Superbowl ads early to its Facebook fans.
Kim says that will generate some extra buzz for GM.
The ads will focus on the Chevrolet brand. Chevy generates about 70% of GM's sales in the U.S.
General Motors is saying thanks but no thanks to more federal loans. The Detroit automaker is withdrawing its application for more than 14-billion dollars in low-cost loans from the Department of Energy.
Many car companies including Ford have received DOE loans, which are intended to help auto companies revamp factories to build more fuel-efficient cars and trucks. GM applied for loans through the program shortly after emerging from bankruptcy. But the automaker says its financial situation has improved since then.
Gerry Meyers is a professor at the University of Michigan Ross School of Business. He's also a former Chairman of American Motors Corporation. He says taking the loans would have given GM more debt. And the automaker told prospective IPO investors late last year that it would avoid going deeply into debt.
It’s quite clear that they’re trying to clean up that balance sheet and also get the government out of the business, so it’s just another step in that direction and I think it’s wise.
Meyers says the next step to GM’s recovery is to stop the revolving door at the top executive level. The company has had four CEOs in two years.
Timothy Massad, the senior Treasury official managing the government bailout fund, told a congressional hearing that there is now a path forward for Treasury to sell its remaining shares in GM over the next two years if market conditions permit. The Treasury Department trimmed its stake in GM to 26.5 percent of the company, down from 61 percent, when it sold $23.1 billion of GM stock at an initial public offering in November.
At the Detroit International Auto Show, domestic automakers are celebrating a comeback of their industry. GM and Ford both saw profits last year, and the car makers are expecting a good year this year.
As more proof of the comeback, Bill Vlasic and Nick Bunkley report in the New York Times about profit-sharing checks that are expected to go to GM and Ford workers:
The two big Detroit carmakers will announce profit-sharing checks this month for their hourly workers, perhaps the largest in a decade, company officials and industry analysts say.
The checks are expected to top out at $5,000 at Ford, less at GM.
They report these checks "would be the biggest payout since the $8,000 checks that Ford handed out in 2000." Chrysler, the report says, is not expected to issue bonus checks this year.
General Motors is stepping up its advertising budget for major sporting events. GM says it has reached a deal with NBC to be the exclusive domestic automotive advertiser during the 2012 London Olympics.
General Motors invested heavily in Olympic advertising in the past, but that spending dipped as the automaker has struggled in recent years. That reduced spending also included the Super Bowl.
The 2011 North American International Auto Show is in a decidedly upbeat mood.
After two years of somber shows, automakers are rolling out new products and showcasing an unusual level of variety and innovation. And they're bullish about how consumers will respond to all those new choices.
Chrysler might be the poster child for the resurgent feeling at this year’s show.
Last year, the automaker barely had a presence, and Chrysler Brand President Olivier Francois remembered how that felt.
Today president of GM North America, Mark Reuss spoke with Michigan Radio's All Things Considered Host, Jennifer White.
The Chevy Volt won the "Car of the Year Award" at the Detroit Auto Show. White asked Reuss why the auto company has put so much into the development of the Volt.
"If you look at the electric and hybrid car piece of the industry, it's been steadily gaining in popularity as time goes on. But what does it take to go beyond hybrid? To go beyond the traditional electric car and produce something that really has an exteded range with the gasoline and the battery on board, so you don't have to worry about an electric engine on board?"
Reuss said they accomplished that with the development of the Volt, and that GM remained focused on the Volt through some rough times.
When asked about the prospects for the new car market, Reuss was upbeat because he says there are a lot of people driving older cars, so there's "pent up demand" for new cars:
"And the reason why I say this is because if you look at the cost to operate some of the newer vehicles from a fuel efficiency standpoint, they're much, much lower than some of the vehicles these people are forced to hang onto."
Reuss said, in the past, the company has been good at engineering and building trucks and some of the "truck variants," but today they're re-focusing their efforts on smaller cars:
"We have refocused with the launch of things like the Volt, and the Sonic for Chevrolet, and then the Verano for Buick. We've really refocused our efforts into excellence in the small and compact car markets. And you're going to see those as really good alternatives in the market as we go forward."
Reuss was asked how he views the automotive industry today. Here's his response:
December auto sales numbers are due tomorrow. It’s expected to be another good month for Detroit’s automakers.
After watching auto sales dwindle in the depths of the recession, auto companies have seen a surge in buying demand in recent months. December is expected to be the third straight month of strong domestic auto sales.
GM is offering some of its employees a buyout this Christmas. The buyout offer will target at 8 assembly plants in Michigan.
The Associated Press reports:
General Motors is offering buyouts to several thousand skilled trades workers at 14 plants around the U.S.
The automaker will pay eligible workers $60,000 to retire with full benefits. Younger workers will have the option to take the $60,000 in exchange for giving up retiree health care and other benefits. GM spokesman Chris Lee didn't know how many workers will get the offers.
At a presentation to the Automotive Press Association in Detroit yesterday, Michael Robinet, director of global production forecasters at IHS Automotive, said U.S. auto sales could reach 17 million in 4 years. Robinet predicts sales will exceed 12.8 million next year and 16 million in 2013. As the Detroit Free Press reports:
That would be a huge reversal from the historically low sales levels that brought the industry to its knees during the recent recession. The last time industry sales exceeded 17 million was in 2001.
Comerica Bank’s monthly gauge of Michigan’s economic activity shows a slight dip in October. The state’s economy spiked up in September.
Comerica Bank chief economist Dana Johnson says Michigan’s economy has essentially been flat for the past four months. Johnson says:
As has been the case in the national economy over the second half of the year, growth in Michigan has been sluggish and uneven. Looking ahead, the Michigan economy is poised to make modest gains in coming months, against a background of gradually accelerating national growth.
The Michigan Economic Activity Index weighs nine, seasonally-adjusted indicators of real economic activity.
These indicators reflect activity in the construction, manufacturing and service sectors as well as job growth and consumer outlays.
It was ground zero for the "arsenal of democracy" in the 1940s. Henry Ford built the giant Willow Run factory to manufacture B-24 bombers in World War II. Later GM took over the building making everything from Chevy trucks, the Caprice, the Nova, Corvairs, and transmissions.
Today, the materials inside the plant are being auctioned off as part of the "Old GM's" bankruptcy reorganization (old GM is now known as the Motors Liquidation Company).
Ford sales are up 24%, Chrysler sales are up 17%, and GM's are up 11%. It's been a good news week for the "Big Three" (can we still call them that?). Chrysler and GM also announced they plan to hire more workers in Michigan, and the Brookings Institution says Metro Detroit is recovering.
Here are some figures from a number-laden Detroit News article on auto sales:
Sales for Chrysler's Jeep brand were up 58 % for November compared to a year ago
Ford's year-to-date sales total 1.74 million vehicles - growing at a pace double the industry average
Ford's F-Series trucks were up 26 %
GM's big brand Chevrolet was up 18 % for the month compared to a year ago, its sales strengthened by the new compact Cruze and popular Equinox and Silverado
General Motors has just announced that it will hire 1,000 engineers to work on battery technology in Michigan. The jobs include helping to develop batteries for hybrid, electric and hydrogen fuel cell vehicles. Most of the jobs will be at a technical center in Warren.
The Detroit Free Press reports the jobs come as GM:
…prepares to deliver the first Chevrolet Volt extended-range electric cars next month… GM plans to build 10,000 Volts by the end of 2011 and at least 45,000 in 2012. Initially, the Volt will sell in California, New York City, Washington, D.C., and Austin, Texas. Next spring, those markets will expand to include Michigan, New Jersey, Connecticut and the rest of New York and Texas. Within a year and a half, GM plans to sell the Volt nationwide.
General Motors (GM) stock returned to trading on Wall Street yesterday for the first time since the company collapsed, declared bankruptcy, and was rescued by an infusion of fifty billion taxpayer dollars.
While Michigan has been focusing on diversifying its economy to make up for the loss of jobs in the auto industry, GM's return to public trading suggests that the auto industry in Michigan will continue to be a major economic player in the region.
The New York Stock Exchanged closed. AFP News reports "GM stocks closed at 34.19 dollars, up 3.6 percent from GM's initial sale price announced on Wednesday, but below session highs of 35.60 dollars a share."
The Detroit News reports the GM executives who attended the opening day for GM stock on the New York Stock Exchange bought hundreds of shares in the company themselves.
GM North American chief Mark Reuss called it an emotional day, saying he was proud to work for GM and thanking taxpayers for giving GM "a second chance."
The News reports the GM execs will head back to Detroit "after today's events in order to attend a private employee celebration at the company's Renaissance Center headquarters."
GM executives rang the bell and played a recording of a Chevy Camaro revving its engine to open trading at the New York Stock Exchange this morning. As of this writing, the stock, bought during the IPO at $33 per share, has jumped to $35 per share in trading. Here's how it's tracking next to Ford's stock (F):