Stellantis workers to get larger profit share thanks to improved formula
Stellantis NV will shell out profit-sharing checks of $8,010 before taxes, a 10% increase from last year after the United Auto Workers negotiated a richer formula in 2019 contract talks.
The transatlantic automaker, the merger between Fiat Chrysler Automobiles NV and French rival Groupe PSA, announced profit-sharing early Wednesday as part of full-year 2020 earnings for both companies, which combined in January. Profit-sharing for U.S. workers is based on FCA's North American margin. It fell to 8.9% from 2019's 9.1% as the COVID-19 pandemic hampered production and demand.
But the union negotiated in 2019 a new profit-sharing formula that went into effect for 2020. It increased contributions by $100 so employees receive $900 per 1% of profit margin in North America. The contract also removed a $12,000 maximum. Individual bonuses are based on the hours each employee worked last year.
"The average payout of $8,010 is well deserved for the hard work, dedication and sacrifices the membership showed in 2020," UAW Vice President Cindy Estrada said in a statement. "I would like to thank the 2019 UAW FCA National Negotiating Team for their hard work in improving the Profit Sharing Plan which is realizing a 12% increase in the payout this year over the previous agreement.”
Roughly 44,000 FCA employees received up to $7,280 in profit-sharing last year. This year, there are approximately 43,000 eligible hourly U.S. workers at the maker of Jeep SUVs and Ram trucks. Workers should see the payments in their March 15 paycheck, according to Stellantis.
General Motors Co. and Ford Motor Co. calculate profit-sharing based on North American earnings. Their formulas were not altered during 2019 labor talks.
Still, GM workers will get the biggest payouts. The Detroit automaker will pay up to $9,000 to 44,000 eligible UAW hourly employees compared to $8,000 last year. The Detroit automaker made $9 billion in pre-tax earnings in North America.
Ford's payouts are the smallest. The checks are up to $3,625, down 45%, based on $3.625 billion in pre-tax earnings in North America. In 2020, the Dearborn automaker's employees received a $6,600 bonus.