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Detroit 3 pay out $305 million to UAW retirees for inflation bonus

Detroit 3 pay out $305 million to UAW retirees for inflation bonus
GM spends $200 million, Ford $70 million, and Chrysler $35 million
David Barkholz
Automotive News | December 14, 2010 – 4:15 pm EST
UPDATED: 12/14/10 8:52 pm ET

DETROIT — General Motor Co. this week spent more than $200 million to pay a lump-sum inflation bonus of up to $700 to its 267,000 hourly retirees and 72,000 surviving spouses.

Ford Motor Co. expects to pay out more than $70 million next week for the same purpose.

Chrysler Group paid $35 million this month to UAW-represented retirees and surviving spouses and another $6 million to hourly retirees represented by other unions, said Chrysler spokeswoman Shawn Morgan.

The UAW payments were required by the master UAW contracts with the Detroit 3.

Active hourly employees at GM, Ford and Chrysler won’t get inflation adjustments this year. They gave up a cost-of-living allowance this year and next as part of 2007 and 2009 contract concessions.

GM has 53,000 hourly employees and Ford has 41,000. Salaried employees at the Detroit 3 do not receive COLA payments. GM said this month that its 26,000 salaried employees will not receive raises in 2011 either.

The payments to GM hourly retirees were made Dec. 13, said GM spokeswoman Sherrie Childers Arb.

Hourly retirees fondly refer to the $700 inflation catch-up as “a Christmas bonus” because it comes in December every year. Surviving spouses can receive up to $455.

Dick Danjin, a retired GM employee and one-time UAW International representative, said he would have liked to see active workers get COLA, too, in light of GM’s profits and Chrysler’s improved financial performance.

“The companies had a contractual obligation to us,” Danjin said. “It’s a shame, though, that some concessions couldn’t be made to active employees given the state of affairs at GM and Chrysler.”

PRINTED FROM: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101214/OEM01/101219920/1424&template=printart

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