Fiat Chrysler-UAW profit sharing increases to $2,750
Hourly employees for FCA US, formerly Chrysler Group, will receive profit-sharing payments of up to $2,750 by the end of February.
The amount is the highest under the United Auto Workers union’s current four-year contract with the automaker, but far less than workers at crosstown rivals General Motors Co. and Ford Motor Co. will get. Workers at Ford will receive an average of $6,900 for 2014. GM workers will find out their profit-sharing amounts Wednesday.
Last year, Chrysler workers received up to $2,500, Ford hourly workers received up to $8,800 and GM employees received up to $7,500. Check amounts likely will be down for GM by more than $1,000.
FCA US has about 35,700 hourly employees. Eligible workers get $1 for every $1 million in profits, based on 85 percent of worldwide operating profit of the company. That percentage represents North American operations for the company. The company’s modified operating profit increased 10 percent to $3.5 billion in 2014.
UAW Vice President Norwood Jewell, who directs the union’s Chrysler Department, called the profit sharing “good news” for the 37,500 or so hourly workers for the automaker.
“UAW members at Fiat Chrysler take great pride in the craftsmanship that is helping the company make such a positive impression with consumers,” he said in an emailed statement to The Detroit News. “This is good news for the dedicated members who have sacrificed much and have worked hard to help Chrysler through some very tough times in the industry.”
Although FCA US payments have been far lower than its crosstown rivals in recent years, Chrysler employees received the most from 1993 through 1999 — at times about $7,000 more than GM workers, and $6,000 or more than Ford employees.
The operating profit was released in connection to the company reporting a net profit on Tuesday of $1.2 billion in 2014, down 56 percent from $2.8 billion in 2013.
The significant drop is linked to expenses of $1.2 billion related to former Italian parent Fiat SpA fully acquiring the former Chrysler Group in January. Adjusted net income for 2014 was $2.4 billion, up 31 percent from $1.8 billion in 2013.
Net revenues for FCA US were $83.1 billion for 2014, up 15 percent from $72.1 billion the previous year. The year-over-year improvement was driven by increased shipments of Ram Truck and Jeep vehicles, according to Chief Financial Officer Richard Palmer.
“U.S. Jeep sales increased 41 percent, with sales of almost 700,000 units,” he said during a call on Tuesday with financial analysts and news media. He added the automaker’s U.S. market share increased to 12.4 percent.
Worldwide shipments for FCA US last year were 2.9 million vehicles, up from 2.6 million vehicles in 2013.
FCA US earnings and sales came a week after parent company Fiat Chrysler Automobiles NV reported a profit of 632 million euros (about $718 million) in 2014, down from 1.9 billion euros ($2.2 billion) in 2013 — but in line with its full-year guidance.
Fiat Chrysler’s decrease in profit was primarily due to aggressive investments as part of a previously announced five-year plan; 650 million euros ($738.6 million) in recall costs for North America; and a 495 million euro payment that was part of fully acquiring Chrysler Group.
Fiat Chrysler worldwide shipped 4.6 million cars and trucks in 2014, including a record of more than 1 million Jeeps. The shipments were up 6 percent compared to 2013 but just missed the company’s 4.7 million forecast for 2014.
Fiat Chrysler shares, traded under FCAU, closed Wednesday up 3.3 percent to $13.95 per share.
FCA US still reports earnings separately from its parent company as an obligation under outstanding debt agreements from 2011.