GM to pay salaried workers bigger bonuses despite turbulent 2019

Most of the 69,000 salaried workers at General Motors can expect to receive annual bonuses in two weeks that match or exceed the amount they got last year, the Free Press has learned.

The bonuses come despite a turbulent year for GM. A year ago this month, the automaker began cutting some 4,000 salaried jobs, mostly in North America, as part of a restructuring plan to save it $2.5 billion in 2019.

Then, in the fall, the UAW had a 40-day nationwide strike against GM after the automaker said it would idle three U.S. factories: Lordstown Assembly in Ohio and transmission plants in Warren and Baltimore. A fourth, Detroit-Hamtramck Assembly, won a reprieve in the UAW contract. But the strike cost GM $3.6 billion in 2019 pretax profits.

Despite all of that, GM hit its global financial and other performance goals, allowing it to boost the bonus payments to salaried employees who meet their individual performance targets, a GM spokesman confirmed.

"We had a very strong performance in 2019," said Pat Morrissey, GM spokesman. "When GM wins, all of our team members win.”

The payout

GM employs 164,000 workers globally. Of those, 69,000 are salaried and about 48,000 of those salaried employees work in the United States, Morrissey said.

GM's supervisors are meeting with salaried employees to tell them their bonus amounts, he said. Employees will receive their bonus payment in their Feb. 28 paychecks.

GM does not disclose those amounts publicly because they can vary from zero, for people who are poor performers, to tens of thousands of dollars for high achievers with large salaries. There is no one-size-fits-all formula similar to that for GM's hourly workforce.

The GM-negotiated formula with the UAW for hourly workers' profit-sharing checks is $1,000 per every $1 billion in GM's North America earnings before interest and taxes. On Feb. 5, GM reported that its 2019 North American pretax profit was $8.2 billion, down from $10.8 billion in 2018. About 47,000 U.S. hourly workers will receive a profit-sharing check of about $8,000, down from $10,750 in 2018, GM said.

Two people familiar with GM's salaried workforce bonus program said GM raised the bonus payout marginally for 2019 from a year earlier. They declined to be named because they are not authorized to speak to the media, but they said a white-collar worker making $100,000 a year and who meets their performance targets could get a bonus of about $11,400 for 2019, up from $10,000 for 2018.

More: GM's laid off workers tell Ford employees: Start looking for new job

Anxiety alleviated

This news alleviates the fear many salaried workers expressed as the UAW strike dragged into a fifth week last October.

Several of GM's white-collar workers grew increasingly on edge about the impact the strike would have on their jobs and compensation.

One GM engineer, who asked to not be identified for fear of losing his job, told the Free Press then that he and some of his colleagues worried salaried workers might lose some of their job security or wages so that GM could satisfy the hourly workers' demands.

These upcoming bonuses along with the hourly employees' $8,000 profit-sharing checks are the best ways to attract and retain talent, said Adam Robinson, CEO of Hireology, a Chicago-based recruitment platform used by many car dealerships.

“If I’m talking to a potential hire and I’m competing with other employers — I can say that you come here, you participate in the outcome because we have a generous profit sharing,” said Robinson. “It will make a difference in competing for talent.”

More: GM salaried workers feel anxiety about union negotiations

More: GM to pay UAW workers $8,000 in profit sharing

Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.