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Profit-Sharing Checks Replace Autoworkers Raises

Jan 30, 2013
Originally published on January 30, 2013 10:44 am

Transcript

STEVE INSKEEP, HOST:

The Ford Motor Company also announced its earnings yesterday, saying it had a pre-tax profit of $8 billion for 2012. And that gives union employees a reason to celebrate. They will each get a profit sharing check of $8,300 - a record high amount.

There's also some good news coming for General Motors workers, as Michigan Radio's Tracy Samilton reports.

TRACY SAMILTON, BYLINE: GM hasn't announced earnings yet, but the company was roughly as profitable as Ford in the first nine months last year. So unless GM's fourth quarter tanked - which no one expects - its union workers will get big checks, too.

Kristin Dzickek of the Center for Automotive Research says it's a welcome source of income, even though profit-sharing has permanently replaced what many workers like even better - a raise.

KRISTIN DZICKEK: We have to, you know, balance this $8,300 check against eight years of no annual wage increase. Costs have gone up in eight years.

SAMILTON: The check makes the biggest difference for entry level workers, representing nearly 25 percent of their regular earnings. As to what workers tend to do with the checks - it runs the gamut, from paying bills - to a down payment for a car made in their own factory.

Mike Mackenzie is with Royal Oak Ford.

MIKE MACKENZIE: A lot of times people have been waiting for that profit-sharing check. Hopefully that means more car sales for us.

SAMILTON: And more car sales means more profits for the automakers.

Chrysler workers can expect profit sharing checks, too, but they won't be as sizable. That's because the smallest of the Detroit three is also generating the smallest profits.

For NPR News, I'm Tracy Samilton in Ann Arbor. Transcript provided by NPR, Copyright NPR.