Most Ford U.S. hourly workers to get up to $7,377 in profit sharing
Most Ford Motor Co. hourly employees in the United States will receive up to $7,377 in profit-sharing in coming checks based on the company's strong 2021 financial results. That's more than double its average $3,625 payouts the year before.
Ford has approximately 56,000 U.S. hourly workers, but not all of them are eligible for profit-sharing. Temporary employees, for example, are not eligible, and eligibility is based in part on the number of hours worked. Ford could not say Thursday how many meet the eligibility criteria.
"UAW Ford members worked diligently and remained dedicated to produce the finest built products in the world during a year that presented great challenges due to the pandemic and unprecedented supply chain issues," United Auto Workers Chuck Browning, director of the union's Ford Department, said in a statement. "Their contributions to Ford Motor Company’s profits under such conditions are to be commended and our members should be very proud of this great accomplishment."
Meanwhile at crosstown rival General Motors Co., about 42,500 U.S. hourly workers will receive up to $10,250 in profit-sharing come their Feb. 25 checks. Stellantis NV, maker of Jeep SUVs and Ram trucks, is scheduled to report year-end financials on Feb. 23 and likely detail its profit-sharing payouts
Hefty payouts to autoworkers "is like the icing on the cake," said Patrick Anderson, CEO of East Lansing-based Anderson Economic Group. "It means that we ... made enough money to have dinner and dessert and we get a cherry on top of the dessert. It is all positive news. It definitely goes into additional spending in Michigan and other Midwestern states, although not all at once."
Anderson expects much of the cash will be saved as Americans watch inflation rise: "If we were back in 2005 ... and we were to get a big round of bonus checks for autoworkers, I would expect a very large share of that to be spent over the next two months. But now I think a very large share of this is going to be saved because of the uncertainty people feel about the economy."
Detroit automakers pay profit sharing based on their North American profits. GM's pre-tax earnings in North America were $10.3 billion in 2021, the automaker reported Tuesday. Ford's pre-tax North America earnings were $7.37 billion.
Automakers reported healthy earnings despite lost production across multiple plants thanks to supply issues — specifically with semiconductors, the tiny microchips that power everything from the heated seats to the infotainment system.
Shortages of vehicles on dealer lots caused some chaos throughout the year. But the chip crunch, a byproduct of the COVID-19 pandemic, but also helped to up transaction prices and increase profits despite lower sales volumes.
Overall, Ford booked $17.9 billion in net income last year with help from a $9.1 billion gain for the year from its stake in Rivian Automotive Inc. The startup maker of electric pickups and SUVs went public last year to investor acclaim before it shares settled back.
"Everybody should be happy about a big bonus that is double the size of last year's," said Erik Gordon, a professor at the University of Michigan's Ross Business School, in a statement. "Thanks should be given to the Rivian investment that pumped up earnings."