By on May 22, 2014

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With negotiations between the UAW and the Big Three set to open next year, FCA head Sergio Marchionne has already fired the first shots, calling for an end to the two-tier wage system and a new pay structure, tied to profit-sharing.

Speaking to Reuters, Marchionne discussed his plan to eliminate the two-tier structure, replacing it with a yet-untested system

“The way you do this is you grandfather the Tier 1s,” Marchionne said of the veteran workers. “You make them a dying class and you build a Tier 2 structure that sets the wage mechanism for the next generation.

“When you have a bumper year, you pay them as much as a Tier 1 would make if not more,” he added of the lower-tier wage scale. “But if I’m in the toilet because the markets are down or GM is successful, or Ford, and then we go down in earnings, then I think at the end of the day you share the pain with the company.”

While the UAW did not comment on Marchionne’s proposal, the UAW has historically been against two-tier wages as well. In my view, Marchionne’s proposal is interesting, in that it lets the hourly workers have some “skin in the game” when it comes to their own financial success, as well as a feeling of pride and accomplishment when FCA succeeds. Given that FCA’s American units like Jeep and Ram are practically carrying the company, the intangible elements would be a strong motivator – of course, it also leaves workers exposed to managerial incompetence, the prospect of other business units dragging down overall performance or both. Let us know what you think in the comments.

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58 Comments on “QOTD: Skin In The Game...”


  • avatar
    Omnifan

    The reality on profit based bonuses is this:

    When times are good, the bonuses are huge, and the workforce could care less about future directions of the enterprise.

    But…

    When times are bad, “management” becomes the bogeyman to the workforce. THEY didn’t plan the right product, THEY didn’t price the product correctly, etc.

    I agree with Sergio, but also don’t believe we’ll ever see ANY union agree to wages tied to productivity. No one EVER wants to see their pay drop, especially when it “…isn’t my fault that MANAGEMENT is stupid.”

    • 0 avatar
      Rod Panhard

      That’s exactly the union’s argument against profit sharing. It’s also why they call it a “bargaining collective.”

    • 0 avatar
      raph

      To play the devil’s advocate, at the level of pay top executives receive I wouldn’t call that attitude misplaced.

    • 0 avatar
      Ion

      Do you honestly believe that management will be sharing any of the blame or punishment when the company is having troubles? This sounds like they’ll be stiffing the guys at the bottom of the totem pole.

      • 0 avatar

        Yep, HP announced today that they’re laying off 16,000 employees. Now which is more likely; HP has 16,000 useless employees at the bottom who have very little say in how the company works, or HP has 1 useless employee at the top who calls all the shots ?

        • 0 avatar
          highdesertcat

          [email protected], HP has some serious problems and laying off 16,000 employees is just the start of it all.

          Biggest problem IMO, far fewer people buying HP products than they need to stay on their current business plan.

          There was a time when HP products were topline stuff. I set up the real estate business of my wife and her family using HP LJ4 printers and HP 486 PCs, and that system is still running flawlessly today (on DOS5 and MSM from Micronetics).

          When HP changed their business direction to become an ink seller and cheapified their printerline with Inkjets, a lot of people voted with their feet.

          I’m hoping that the system that I set up for my wife and her family will last through the end of the year. But if for some reason I would have to outfit a new system for them, my recommendation would be a series of networked Dell XPS 2720 All-in-one PCs sharing two Brother All-in-one color laser printers.

          That’s what I use now that my entire XP-network LAN system died a few days after April 8th, and the capabilities of just one XPS 2720, running W8.1, replaced a Command PC, a File Server, a Shadow Server, a Print Server and a Firewall PC. Truly astonishing!

        • 0 avatar
          wumpus

          I wouldn’t say “1 at the top”. The board of directors haven’t hired anybody worth a clue since David Packard presumably put Lewis E. Platt (who worked up the ladder under the “hp way”) in charge (well, Mr. Packard was still chair of the board. Who is going to gainsay someone whose name is half the name of the company). Once both Mr. Hewlett and Mr. Packard were dead, they put in Carly Fiorina and the merry band of crooks that followed.

          Wasn’t this yesterday’s post “companies with strong brands have no incentive to make quality products”? Mr. Hewlett and Mr. Packard wanted a strong, healthy company and created one. Once they were gone Wall Street wanted quick profits and got that. What is left is hardly the same.

  • avatar
    GST

    Isn’t that the type of profit sharing pay system that the very successful Southwest Airlines employs?

    Hard to see how the UAW would adopt it, but think of the possibilites if they did and it was successful, perhaps thty could organize the southern plants.

  • avatar
    CJinSD

    Set a single wage for the next contract at the average for the two existing wages. Let the Tier 2 union members fight for it as the Tier 1 union members scream bloody murder. Solidarity! Implode the UAW.

  • avatar
    DIYer

    I worked for a family-owned automotive supply company that kept 3 sets of books:

    – They didn’t like to pay taxes on company profits, so there was a set that showed the company didn’t make any money on an overall basis
    – They didn’t like to pay bonuses to the divisional managers, so there was a second set that showed the various divisions didn’t make any money and therefore no manager bonus. The workers never received a bonus of any kind.
    – There was a third set of books that supposedly showed what really went on, and was for the owner’s eyes only. This company was eventually sold to a much larger Japanese automotive supplier.

    The bottom line is, companies pay workers bonus when they want or feel the need to. Good luck trying to look at the books. The big auto companies in particular try not to appear none too profitable, crying poor heading into union negotiation season, in order to present a case for minimal wage increases.

    • 0 avatar
      jbreuckm

      The key phrase here is “family-owned supplier.” Private firms have different accounting standards. FCA has to comply with SEC rules, which eliminates many of the shenanigans that private firms can engage in.

      Public companies can cook books too, of course, but it’s harder and would provide the employees better recourse for audits, etc. when compared to a private firm that is not subject to the same kind of oversight.

      • 0 avatar
        05lgt

        SEC regulations do next to nothing compared to the ability to book R&D costs, acquisitions, one time expense write downs etc. whenever, and claim that intra company handoffs from nation to nation are valued at whatever makes the least taxable total. The definitions of profit and auditability of such an agreement would only make sense until the next accounting scheme compensated for it. Don’t get me wrong, I hate the UAW and think the 2 tier system is exhibit one in why no one should voluntarily join them.

      • 0 avatar
        Victor

        SEC does not prevent profit from being shattered by project costs and amortizations, by intra-group dealings and the like. Let’s not forget that legislative houses, tax bills and stock markets regulatory authorities all over the planet are under strong pressure of corporate lobby – and the auto industry is particularly influent. It’s one intricate balance between State and corporate goals. The same thing happens in every country trying to tax income or profits.

  • avatar
    Conslaw

    There’s no question that 2-tier has to go. It will kill the UAW if the UAW doesn’t kill it first. The difference between $15.00/hour and $25.00 per hour is huge in the real world. I have worked around a lot of Tier 2 workers, and it isn’t a wage on which most people can raise a family. The answer though isn’t to make up the difference with contingent compensation. Not having a dependable wage affects your decision-making in countless ways. If you’re the lending officer at a local bank, You aren’t going to give the same loan to a worker who makes $40k guaranteed and MIGHT make 80k as you would to a worker who makes $70k straight-time. If you have a kid looking at college, which colleges do you consider? Consider this also: Time and a half at $15/hour is $22.50. Time and a half at $25.00/hour is $37.50. A tier-2 base wage creates an incentive to work schedule on overtime rather than hiring workers. Persistent overtime is not good for family life and health.

    • 0 avatar
      jmo

      “You aren’t going to give the same loan to a worker who makes $40k guaranteed and MIGHT make 80k as you would to a worker who makes $70k straight-time. ”

      But, the reality is more sometimes 40k sometimes 80k vs. most of the time 60k but some of the time laid off.

    • 0 avatar
      redav

      “You aren’t going to give the same loan to a worker who makes $40k guaranteed and MIGHT make 80k as you would to a worker who makes $70k straight-time.”

      And that’s for good reason.

      There is a terrible line of thought among many who get bonuses (or overtime) which is that their bonus is salary and not a bonus. I agree it’s hard to raise a family on $30k a year, but the moment you start counting on a bonus you dig a trap that can be deadly if you fall into. (But that’s a different thing than banking a bonus and then withdrawing it from savings when needed. The difference is the forward planning on getting something you aren’t assured versus saving what you get and using it after it’s real and in your hands.)

    • 0 avatar
      TW5

      So Tier 2 workers can’t mortgage their lives away and they have to be smart about school tuition. They get big cash bonuses for down payments and so forth. Sounds like the company is doing them a favor.

      • 0 avatar
        tonycd

        Gee, that’s a pretty generous favor of them. I wouldn’t want my employer to do me the disservice of a guaranteed wage, would you?

        • 0 avatar
          matador

          I’m self-employed. I don’t get a base salary at all. Everything is based on performance and market conditions.

          I agree somewhat with TW5’s point. I’ve seen many people get a bonus of some sort, make a large purchase, and get in big trouble with it.

          Many people just don’t handle a bonus properly. Live life as you were doing, and keep the rest (or at least most) in savings.

  • avatar
    OneAlpha

    Profit-sharing is a spectacular idea.

    It just seems right to give all the employees an incentive to identify with the company’s financial success as their own.

    Couple that with the phasing out of the existing union arrangements, and it sounds like a win-win to me.

    • 0 avatar
      redav

      I also support profit sharing, but the bonuses should be reasonable rather than windfalls–especially for executives. If anything, their bonuses should be in some form of stock so that their value is truly dependent on the (long term) value they add to the company and not just a good-ol’-boy pat on the back.

    • 0 avatar
      redliner

      Yes, as long as this goes all the way up to boardroom level executives, then I’m all for it. The employees that make a company profitable should be able to share in the rewards.

      Without it, there is no incentive to give 110% because you know that all your hard work is just going to get sucked up at the top level.

  • avatar
    jbreuckm

    Something like this sounds attractive and could work – as long as there is a base pay rate that acts as a floor and that is enough to provide a living wage for the line employee. It is true that profits are dependent upon management, and also other factors (i.e. operational profit vs. accounting profit).

    • 0 avatar
      highdesertcat

      In Detroit/Auburn, minimum wage is a living wage. People with money have no problem in seeing the bargain that Detroit is today and are scooping up whatever appeals to them.

      • 0 avatar
        tonycd

        “In Detroit, minimum wage is a living wage.”

        I’m pretty confident you don’t have to live at the standard at which a Detroit resident would live on the minimum wage.

        This comment also fails to recognize that in many ways, being a poorly paid individual in a downtrodden community actually raises your cost of living. The discount chains that offer the best value on essentials won’t locate near you. Your insurance costs go through the roof. You pay much more for credit, whether your actual credit history is responsible or not. Your quality of life, and standard of living, are also eroded in both financial and intangible ways by realities like pollution and crime.

        As for well-heeled speculators “scooping up” distress-priced real estate in Detroit, this isn’t an opportunity for the working poor. It’s exactly the opposite: it’s an opportunity for the rapacious rich to prey on the working poor whenever they can’t make enough money to hold onto whatever modest property assets (like their own homes, or a single rental property) they’d been able to gather in an earlier era of more humane middle-class wages.

        I’m willing to bet you don’t have to live with pressures like these that have taken over the lives of countless tens of millions of Americans who, believe it or not, are not some inferior species of wastrels — they’re mostly hard-working ordinary people just like you. Mercy on you if/when you join the unlucky fellow citizens toward whom you temporarily delude yourself that you’re so inherently superior.

        • 0 avatar
          highdesertcat

          tonycd, you do me an injustice. Maybe you just misinterpreted my comment.

          • 0 avatar
            tonycd

            cat, I kind of hope I did.

          • 0 avatar
            highdesertcat

            Mine was not a derogatory comment. Words have meaning and I chose mine very carefully so as not to offend anyone because of the reality that is Detroit today.

            Through my wife’s nationwide real estate associations I came to know an (African-American) real estate developer who is betting his future wealth largely on the bargain that is Detroit today.

            An overwhelming number of employers in Detroit today not only pay minimum wage, but keep hours under the magical number that keeps them from having to provide healthcare to their employees.

            However, this is a ruse, done under the guise of ‘job sharing’ where two or three people do the very same job, occupying the very same space, just with staggered hours.

            But these austere times will eventually pass, even for Detroit, and that’s where the current real estate investment strategy will start paying out, big time.

            On a more sober note, realizing that a higher minimum wage will eventually come to pass, my wife’s family business has jacked up the rent rates on all the properties effective Jan 01, 2014, and they are trying to sell (cash out) as many properties as they can before the end of 2014 so that her parents can retire without having to worry about money.

            All those people who think they will benefit from higher minimum wage rates may find that the cost of rice and rent will go up more than what the increase in their minimum wage is.

  • avatar
    geeber

    I thought that the UAW contract already contains provisions for profit-sharing. I’m pretty sure that Ford workers, for example, have received profit-sharing checks.

    • 0 avatar
      dwford

      FCA’s UAW workers got $2500 profit sharing bonuses for 2013. I don’t understand what Sergio is trying to change

      • 0 avatar
        28-Cars-Later

        He might want to tie wages to profitability, which is a stroke of genius if he can pull it off.

        • 0 avatar
          highdesertcat

          It is unlikely he will be able to do so. The track record of the UAW assembly workers is well-established over many decades.

          Documentaries have been made about sloppy assembly, missing fasteners, wrong parts installed (as in rear discs on front hubs), orange-peeling paint because of workers’ deodorant flakes, etc etc etc.

          If the UAW agrees to these terms, and Sergio cranks up the voluntary recalls on Fiatsler products, which is very likely he will do, this will eat voraciously into the profitability AND the UAW’s profit sharing kitty.

          • 0 avatar
            geeber

            It’s not 1975 anymore…the Fords and Chevrolets I regularly check out at the dealer look well-assembled to me.

            Chrysler Corporation has struggled with poor workmanship since the late 1950s, but the new Dodges, Chryslers and Jeeps hardly look like the slammed-together clunkers of yore.

            Defects per vehicle are at a very low rate. Read the old “Owner’s Reports” in Popular Mechanics from the 1950s, 1960s and 1970s. The problems people tolerated will surprise you – hoods and fenders that needed repainted; water leaks that left pools on the floor; transmissions that failed within a few weeks of ownership; cars delivered with multiple dents in the body.

            In 2014, a buzz in the dashboard has the owner invoking the state’s lemon law. Times have definitely changed – for the better.

          • 0 avatar
            highdesertcat

            geeber, I understand all that and you are right. Things have changed for the better since 2009.

            For me to take a chance and buy a 2012 Grand Cherokee for my wife was a big gamble. All purchases, like politics, are personal.

            I’m happy to say that this is the best Jeep product, new or used, we have ever owned, and it has held up just as well as our 2008 Japan-built Highlander has which still lumbers on as my 16-yo grand daughter’s daily ride, day after day, week after week, month after month (without any problems and well over 100K on the clock).

            My point was that it is unlikely for Sergio to pull off tying wages to profitability because the UAW knows that its members have pulled bone-headed stunts in the past (too many to list here) that COULD adversely affect profitability, and thus indirectly wages, if profits tumble.

            That said, I wish him luck. It is my strongly-held belief that the UAW has caused major damage to the US auto industry in the past. Had their track record been different, fewer buyers would have joined the mass exodus toward the foreigners and transplants.

            However, it is unlikely for the UAW to strike Fiatsler any time soon since that would be like cutting off your nose to spite your face, because Fiat took them in, with a little help from their taxpayer friends, after Chrysler had been beaten to death by the UAW over the previous decades.

          • 0 avatar
            NormSV650

            Sort of like loose bolts on Toyota’s?

            http://www.google.com/url?q=http://m.autoblog.com/2013/09/04/toyota-lexus-hybrid-crossover-sedan-recalls/&sa=U&ei=xzN-U5j0NYqe8gHT6IDwCA&ved=0CA0QFjAB&usg=AFQjCNHk4S1iaoAYcVMVubUw1YsLzmJnJg

          • 0 avatar
            highdesertcat

            Exactly, NormSV650! When Toyota started building them in the US, using American labor and American suppliers, the quality of their products took a nosedive. To put it in the current vernacular, it went to hell in a handbag.

            I’ve been saying that for years. So have many other American buyers of early Toyota products.

            American labor, even the non-union labor, is just too preoccupied with other things to put out a quality product on par with the Japanese-made cars.

            When American labor and part suppliers get it right, there is celebration with wild abandon.

            When Japanese labor gets it right, it’s just another day at the plant, like the day before that and the day before that.

  • avatar
    greaseyknight

    The problem with such a pay structure IMHO, is that the workers on the line are so far removed from the profits that their is no correlation between them working hard and the companies success.

    Its a better idea from a corporate standpoint in that if things go bad they are not required to pay the higher wagers. And if things do go well, they can spend the extra money on “expenses” such as wages vs being taxed on it.

  • avatar
    dwford

    How is what Sergio is proposing different from what the current plan is – to slowly replace the tier 1 wage earners with tier 2? The UAW workers already get profit sharing.

  • avatar
    LambourneNL

    I think it’s a ludicrous idea. The guy bolting in the seats doesn’t design the car, choose the parts suppliers, handle marketing, sales incentives or any of the other countless factors that determine how well a car sells.

    Pay the guy for his x hours/day of bolting in seats. QC will tell him if he’s not doing it right.

  • avatar
    mikey

    I’ve chosen to ignore the haters, and the uninformed here.

    Two words come to mind “pattern bargaining” Sergio may be on to something here. How about Ford, and GM? While there has been some movement, and change, from pattern bargaining, its still the back bone of UAW /former big three contracts.

    Who knows? But I can tell you this. Somebody is going to have stand in front of the UAW first tier guys, and state ” your going to have to work for less” Any questions?

    My first questions. So we will all be in it together. Good times and bad times? Fair enough. Will this include salary and excutive compensation? Is GM, Ford, and FCA going to show us the books. can we see the excutive bonuses?

    Good luck Sergio.

    • 0 avatar
      seth1065

      Mikey
      I could be wrong but did the UAW chrysler own part of the company via a health trust? If so I assume they could and did see the books. I would agree it should go up to the top but it will not , but the UAW did agree to the two tier system and that started the divide between the union “brothers”. I think the old timers sold out the new hires and Karma she is a bitch. The UAW seems to be leaking every where in the USA and from what I read if the Canadian gov’t does not pony up major bucks most of the CAW (?) workers will be seeing a lot less work. I do not know what the right system is but the two tier system is not the right system for the workers.

  • avatar
    SoCalMikester

    the way i understand it if youre tier1, youll stay tier1 until you retire. tier2 might start out a little higher than before, but wont top out as high as tier1’s. or something like that

  • avatar
    Big Al from Oz

    As I’ve stated I like what Sergio has done, he’s appears to be good at business.

    Trying to entice the blue collared workers to accept risk with the UAW will be hard. I don’t think the UAW will buy into Sergio’s plan and there will be problems. Imagine a person working and earning more or less to how productive they are?

    The reality is the blue collared workers must realise the risk that the UAW has presented to them.

    A simple way to look at his is by the use of evidence that is credible and verifiable. I would use the foreign manufacturers in the US for this.

    If we use them we will see that the model they are using has less risk. The foreign manufacturers didn’t require a bailout and they do maximise the socialist pandering and protectionism as well as the Detroit manufacturers.

    But I do think overall that the blue collar workers at these ‘foreign’ plants do accept more risk and manage it better.

    The UAW tries to impose anti-risk policies and guidelines thinking it is protecting it’s workers, but at the end of the day look at the city of Detroit and the Detroit manufacturers and tell me who has the best business model for managing vehicle production in NA.

    To me the UAW promote the most destructive form of capitalism. That is to want what a ‘captialist’ has. But they want this without taking any risk.

    To the UAW clowns out there. To improve you lives you must take risk and when you screw up it isn’t the general populace that has to pickup the pieces. This ideal you have only encourages more failure with less productivity and progress.

    You are the luddites of the modern world.

  • avatar
    TW5

    If union workers want more than basic wage, they need to buy stock like the rest of us or negotiate for stock awards/options. We can’t coddle these union people from cradle to grave, and bail out their pensions and healthcare, while giving them SS checks and MED benefits as well.

    • 0 avatar
      tonycd

      We used to be able to “coddle” the vast majority of working Americans with a living wage throughout their careers, healthcare from cradle to grave, and a pension.

      What changed? Contrary to popular belief, it’s not that our nation and our employers no longer have the money to do all this as they did for generations, and remain successful. It’s that today’s successors to the Robber Barons of a century ago have collectively decided that they no longer WANT to do this.

      Which is why we’re now told, by both political parties, that we still have money for fighter planes and aircraft carriers and missiles to be buried in Utah mountainsides, but not enough money to keep bridges from collapsing or babies from going malnourished or public schools from being shuttered for the enrichment of profiteers.

      As a society, we have collectively decided that our only overriding priority now is that it is absolutely intolerable for billionaires to pay the level of taxes they paid in our nation’s most prosperous era ever, the middle of the 20th century. We will sacrifice absolutely anything else to make sure this abomination never happens again. I predict the future will continue to go well… for them.

      • 0 avatar
        baggins

        I immediately ignore any poster who uses the word profiteers.

        I paid nearly 50% of my earnings last year to taxes. How about you?

      • 0 avatar
        TW5

        @tony

        We’ve cut military spending in half since the 1960s. We don’t have money to take care of the working class because Grandma and Grandpa are busy bankrupting the nation by taking advantage of the largesse and spendthrift in Social Security and Medicare.

        Sounds cruel, but if you look at the budget, the numbers are undeniable, and as poverty rates for the over 65 demographic have plummeted, the poverty rates for the under-24 demographic have soared. We are cutting discretionary spending for vital services to cover FICA spending and stealth Medicare spending in the Medicaid budget.

        Corporations are not designed to insure domestic tranquility or promote the general welfare, nor do they have sufficient legal power to do so. Government is supposed to pursue those lofty goals, yet they spend most of their time trying to make Corporate America do their work so they can get back to the job of wasting our money and damaging our economy in the process. Nobody wins when the government puts younger middle-class workers in poverty to take old people out of poverty, yet the government has labeled this arrangement as a “solution” for over 30 years.

        Who protects this system? You can be damn sure it’s not corporations. They want federal spending to be focused on workers, and we’d be lucky if they found a way to make it happen.

        • 0 avatar
          FormerFF

          If you want to know where the money is going, look at what has happened to the income distribution in this county since the 70’s. Social Security tax rates haven’t changed in a long time.

          • 0 avatar
            TW5

            @FF

            FICA tax is not a matter of rates, but of the FICA income threshold. In the 1960s and 1970s, the FICA tax threshold was roughly equal to 100% of median household income. Today, FICA tax is more than 200% of median household income.

            You’ve been taught to scapegoat the rich, but if you looked at the US systems of public administration, particularly for Social Security and Medicare, you’d soon realize that the US is brazenly stupid regarding matters of public admin. Uncle Sam spends more and delivers less than any developed nation.

        • 0 avatar
          danio3834

          It’s no coincidence that the percentage of the population over the age of 65 is now the largest and is growing faster than any other demo. Seniors also vote in the highest numbers.

          None of this bodes well for those of us 1-2 generations below.

  • avatar
    Hillman

    I don’t see how profit can be a performance metric when the line worker is not making decisions that affect profit. I understand basing bonuses on quality control or other areas where the guy on the line can control. This will likely have no impact on performance and could lead to resentment.

    • 0 avatar
      Victor

      The idea is that the individual productivity affects the company as a whole, almost like a butterfly effect. And by doing so, it affects generation of profit. This works just fine when everything is doing great, but it all falls to pieces in recession, for example.

      But it is no precise science. Every company establishes internally its own “metrics” for sharing profit, and the first issue is how fair those metrics seem for the average Joe. No easy thing to do. So, yes, it can generate a state of border line paranoia among staffers, and a lot of resentment. Guys like Paulo Lehmann say it is a good way to filter true talent and to get rid of the also-rans.

      It is in fact the most cruel and realistic way to compensate workers, if done right. To me these are inevitable, bad news to the workers involved.

  • avatar
    DIYer

    http://media.chrysler.com/newsrelease.do?id=11054

    For the record, here’s what the old Chrysler (Iacocca, Eaton, the Germans, LaSorda, and Nardelli) paid out in the way of profit sharing during 25 years from 1986 to 2010. I don’t think anyone got rich off this:

    UAW-Chrysler Profit Sharing History

    Plan Avg. BU Percentage
    Year Payment Factor

    1986 $500 Flat $500
    1987 $500 Flat $500
    1988 $720 2.3%
    1989 $0 0.0%

    1990 $0 0.0%
    1991 $0 0.0%
    1992 $429 1.1%
    1993 $4,300 10.5%
    1994 $8,000 17.9%
    1995 $3,200 7.0%
    1996 $7,900 17.3%
    1997 $4,600 10.2%
    1998 $7,400 14.9%
    1999 $8,100 15.9%

    2000 $375 0.7%
    2001 $0 0.0%
    2002 $460 0.8%
    2003 $0 0.0%
    2004 $1,500 2.5%
    2005 $650 1.1%
    2006 $0 0.0%
    2007 $0 0.0%
    2008 $0 0.0%
    2009 $0 0.0%
    2010 $0 0.0%

    1986-2010 (25 Years)=> Total Payments $49,384
    Average Payment $1,975

    Notes:
    1) In 1985 negotiations, Chrysler and the UAW agreed to $500 payments for the 1986 and 1987 plan years and to negotiate a profit sharing agreement for the 1988 plan year. The plan negotiated in 1988 was designed to share a portion of profits (referred to as Total Profit Share) with eligible participants based on Chrysler’s Return on Sales (ROS). The plan allows employees to share in Chrysler’s U.S. operations profits upon the generation of the
    “first dollar of profits.”

    2) In 2010 there was no profit sharing payment; however, Chrysler paid a $750 discretionary bonus to its employees.

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