Bloomberg News

GM to Pay UAW Workers About $12 Million in Quality Bonuses

December 12, 2011

(Updates shares in the final paragraph.)

Dec. 7 (Bloomberg) -- General Motors Co., 10 weeks after ratifying a new labor contract with the United Auto Workers, said union hourly employees achieved vehicle-quality targets and will be eligible for about $12 million in bonuses.

The $250 bonus per eligible worker will be paid out in employees’ Dec. 16 paychecks, Kim Carpenter, a spokeswoman for the Detroit-based company, said today in a phone interview. The “vast majority” of the automaker’s 48,500 UAW-represented workers are eligible, she said, without giving more specifics.

Chief Executive Officer Dan Akerson has said GM’s new four- year labor contract keeps the automaker competitive by only marginally boosting the company’s $5 billion annual labor tab. Senior workers won’t receive a base wage increase and the union accepted that some pay would be based on GM’s profitability.

Annual quality bonuses are dependent on GM’s target for incidents per 1,000 vehicles that have been in service for two months, Carpenter said.

“We were 98 percent of our target, and so the payout is $250 per eligible UAW employee,” she said.

GM gave wage increases for entry-level workers, $5,000 signing bonuses and other benefits that the company estimates will total $675 million in costs through 2013. The automaker estimates it will get $460 million in savings to partially offset those payouts, according to a Sept. 28 presentation to analysts.

Labor costs will rise 1 percent a year, which is the smallest increase in a GM contract in four decades, the automaker said in September. GM gained 1.2 percent to $21.94 at the close in New York.

--Editors: Bill Koenig, Jamie Butters

To contact the reporters on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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