News Column

Profit Sharing, Performance Bonuses at Chrysler

January 30, 2014

Brent Snavely, Detroit Free Press

Sergio Marchionne
Fiat and Chrysler CEO Sergio Marchionne (file photo)

Jan. 29--Fiat and Chrysler CEO Sergio Marchionne told employees today in a memo that all salaried workers and hourly workers in the U.S. will be getting a performance award or profit-sharing checks based on the company's performance in 2013.

Chrysler also said it earned a profit of $1.8 billion in 2013, up 9% from the prior year, its third consecutive annual profit since it emerged from bankruptcy in 2009.

"Your courage and passion have restored Chrysler to being a competitive force in the auto industry and have created a strong partner with Fiat in building an exciting new global venture," Marchionne said today in a memo obtained by the Free Press. "You have earned the right to take pride in our achievements to date while renewing our shared commitment to strive to be the very best."

Marchionne's memo did not provide an estimated average check amount, but that number could be announced later today.

Given Chrysler's performance in 2013, hourly workers could get their biggest profit sharing check since 1999. Last year, Chrysler workers received an average profit-sharing check of about $2,250 before taxes.

In 2011, UAW workers agreed to forgo annual pay increases in return for a simplified profit-sharing formula in a four-year contract.

Ford and General Motors adopted similar formulas. Ford said Tuesday it will pay a record $8,800 in profit sharing to 47,000 UAW workers after reporting fourth-quarter earnings of $3 billion and a full-year profit of $7.2 billion. General Motors workers also are likely to receive sizable profit sharing checks. GM will report year-end earnings on Feb. 6.

The profit-sharing formula for Chrysler workers is based on the company's pre-tax profit in North America.

About 85% of Chrysler's profits come from North America, according to a summary of Chrysler's 2011 labor contract with the UAW.

Chrysler's pre-tax operating profit in 2013 was $3,176, a 9% increase compared with the $2.9 billion it reported in 2012.

"Based on the company's 2013 accomplishments, I am pleased to inform you that all eligible salaried and represented employees will be entitled to receive a performance award," Marchionne told employees in the memo.

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely

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Original headline: Chrysler workers to get profit sharing, performance bonuses for 2013


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