Chrysler, GM wait on raises, bonuses

January 20, 2012
Chrysler, GM wait on raises, bonuses
Ford boost for 20K salaried workers fails to stir rivals
By BRYCE G. HOFFMAN / The Detroit News
General Motors Co. and Chrysler Group LLC say any raises or bonuses their salaried employees receive will be determined by their financial performance, not by Ford Motor Co.

Last week, the Dearborn automaker sent letters to about 20,000 white-collar workers in the United States and Canada informing them they will receive 2.7 percent raises on April 1, as well as bonuses based on performance.

General Motors said Thursday that it will make a decision about raises and bonuses once its financial results are tallied.

“There will be no division until our business results are finalized,” said GM spokesman Jay Cooney.

The same goes for Chrysler.

“Chrysler Group intends to announce its fourth-quarter and year-end financial results on Feb. 1,” the company said in an email Thursday. “The year-end results will determine whether employees are eligible for annual awards.”

Ford spokeswoman Marcey Evans said the raises are needed to keep pay competitive with other Fortune 100 companies. Ford salaried workers last got pay raises in 2010; only performance bonuses were given in 2011.

Compensation expert John Challenger of Chicago-based Challenger, Gray & Christmas Inc. said it might have been necessary for GM and Chrysler to follow Ford’s lead once, but not anymore.

“There’s still an awful lot of really good people unemployed,” he pointed out.

“It’s not as though workers are in the driver’s seat. When unemployment is low, there’s a lot more pressure on companies to compete for people.”

These days, Challenger says, compensation is more closely tied to corporate performance.

That could bode well for GM workers, though. Though Ford was the only one of the Detroit Three to avoid bankruptcy during the recent economic crisis, GM made more money in the first three quarters of last year.

Ford made $6.6 billion, and GM made $7.6 billion.

Chrysler has yet to report a full-year profit since emerging from bankruptcy in 2009.

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