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GM to pay more than $400 million in worker bonuses
DETROIT – Less than two years after entering bankruptcy, General Motors will extend millions of dollars in bonuses to most of its 48,000 hourly workers as a reward for the company's rapid turnaround after it was rescued by the government.
The payments, disclosed Monday in company documents, are similar to bonuses announced last week for white-collar employees. The bonuses to 76,000 American workers will probably total more than $400 million — an amount that suggests executives have increasing confidence in the automaker's comeback.
In the four years leading up to its 2009 bankruptcy, GM piled up more than $80 billion in losses and was burdened by enormous debt and costly labor contracts.
"On the whole, we made tremendous progress last year," CEO and Chairman Dan Akerson said Monday in an e-mail message to employees announcing the payments. "With our collective teamwork, this can be just the beginning."
The company made $4.2 billion in the first nine months of 2010 and is expected to announce a fourth-quarter profit soon.
Most of GM's hourly workers will get a record payment of more than $4,000 — more than double the previous record in 1999, at the height of the boom in sport utility vehicles and pickup trucks. Nearly all 28,000 white-collar workers such as engineers and managers will get 4 to 16 percent of their base pay. A few — less than 1 percent — will get 50 percent or more.
Bill Selesky, an auto industry analyst with Argus Research in New York, called the recovery "dramatic" and said the payments were needed to stop talent from jumping to other automakers, especially crosstown rival Ford.
The company, he added, is also trying to send a message: "It's the new GM."
But the bonuses drew criticism from an opponent of the auto industry bailout in Washington who said GM should repay its entire $49.5 billion loan before offering bonuses.
http://news.yahoo.com/s/ap/20110214/ap_on_re_us/us_general_motors_bonuses
DETROIT – Less than two years after entering bankruptcy, General Motors will extend millions of dollars in bonuses to most of its 48,000 hourly workers as a reward for the company's rapid turnaround after it was rescued by the government.
The payments, disclosed Monday in company documents, are similar to bonuses announced last week for white-collar employees. The bonuses to 76,000 American workers will probably total more than $400 million — an amount that suggests executives have increasing confidence in the automaker's comeback.
In the four years leading up to its 2009 bankruptcy, GM piled up more than $80 billion in losses and was burdened by enormous debt and costly labor contracts.
"On the whole, we made tremendous progress last year," CEO and Chairman Dan Akerson said Monday in an e-mail message to employees announcing the payments. "With our collective teamwork, this can be just the beginning."
The company made $4.2 billion in the first nine months of 2010 and is expected to announce a fourth-quarter profit soon.
Most of GM's hourly workers will get a record payment of more than $4,000 — more than double the previous record in 1999, at the height of the boom in sport utility vehicles and pickup trucks. Nearly all 28,000 white-collar workers such as engineers and managers will get 4 to 16 percent of their base pay. A few — less than 1 percent — will get 50 percent or more.
Bill Selesky, an auto industry analyst with Argus Research in New York, called the recovery "dramatic" and said the payments were needed to stop talent from jumping to other automakers, especially crosstown rival Ford.
The company, he added, is also trying to send a message: "It's the new GM."
But the bonuses drew criticism from an opponent of the auto industry bailout in Washington who said GM should repay its entire $49.5 billion loan before offering bonuses.
http://news.yahoo.com/s/ap/20110214/ap_on_re_us/us_general_motors_bonuses
