General Motors will pay approximately 42,500 hourly workers up to $10,250 in profit-sharing payments in their Feb. 25 paychecks, based on its strong financial results in 2021, the company announced Feb. 1.
“General Motors is proud to provide our hourly employees with among the highest profit-sharing payments in the auto industry,” said David Barnas, a spokesman for GM.
“In fact, eligible hourly employees have earned more than $72,000 each in profit sharing since 2015.
“The results we are achieving today are helping secure a strong future for all of our employees as we continue to invest billions of dollars in our U.S. manufacturing operations and create thousands of jobs across the country,” he continued.
Meanwhile, workers at a plant in Kansas that was idled for long stretches last year due to the semiconductor chip shortages may not share in the full payouts.
GM and the United Auto Workers union, which represents the workers at that plant, sidestepped the situation at the press conference announcement.
Workers at GM’s Fairfax Assembly plant in Kansas are still awaiting news on how much of the year-end bonus they will receive, and some are concerned it will be substantially less than $10,250.
Many workers at the Kansas plant did not make the hours qualified to be eligible for full profit-sharing payments because of the extended downtime at the auto factory.
GM and the UAW said that they were in discussing the issue, but did not offer details.
GM’s quarterly earnings reached nearly $2 billion, excluding special items, topping the consensus forecast of $1.7 billion predicted by analysts.
The company had earned a total of $10.4 billion for 2021, excluding special items, up from $7.1 billion a year earlier, with a net income increase of 56 percent.GM reported $10 billion in profit on revenue of $127 billion, up from 2020’s $6.4 billion in profit on $122 billion in revenue.
This was despite a global shortage of computer chips and other parts that affected auto production around the world and crimped the company’s production of its cars and trucks.
The shortage forced many car manufacturers to slash production, temporarily shut plants, push new-vehicle inventories to historic lows, and raise prices to all-time highs, which in turn maintained automakers’ profitability.The number of vehicles GM sold fell to 6.3 million worldwide, down 8 percent from 2020 and a decline of 18 percent from the pre-pandemic sales of 2019.
The pandemic slump in sales resulted in GM giving up its spot as the number one automaker in terms of U.S. sales for the first time in nearly a century.
The Detroit automaker said it expects the supply of computer chips to improve this year, but nevertheless gave conservative estimates for 2022 sales and profit similar to the 2021 results.
GM last week announced that it is intending to shift its production from internal combustion engine vehicles to electric vehicles by 2035, with plans to build one million EVs by 2025.
GM is also developing the still unproven technology for autonomous driving vehicles.
The automaker is expecting high demand for EVs including a Hummer EV that just went into production, its Cadillac Lyriq, due later this year, and EV versions of its best-selling Silverado and Sierra pickups by 2024.
GM said it will invest $35 billion in its EVs by 2025, including $7 billion for its Michigan plants.
The company said it has reservations from customers for 59,000 of the Hummer EVs and 110,000 of the Silverado EVs.
“Our clear priority is to accelerate our EV plan and drive growth, and we want to maintain maximum flexibility to invest as opportunities arise,” said Ford CEO, Mary Barra.
Barra also said that the automaker will consider restoring the dividend and share repurchases that it suspended in April 2020 during the pandemic-related recession, but not at this time due to its priority to accelerate its EV growth plan.
GM shares rose just over 1 percent in after-hours trading to $54.65 on Feb. 1.