DETROIT –Co. is working out details on a profit-sharing plan that would see North American hourly workers benefit in the auto maker’s recovery, executives confirm.
The bonuses could be paid out in company stock, a concept Stephen J. Girsky, vice chairman-corporate business development, says he favors during a roundtable session with reporters at the North American International Auto Show.
The United Auto Workers union has made it clear it believes the next contract, due for negotiation this summer, should include some payback provisions that allow hourly workers to benefit from the Detroit Three’s financial recovery and recoup some of the benefit and pay cuts taken in the teeth of the recession.
Past profit-sharing provisions in GM’s labor contract were not popular with line workers, because they often failed to result in a significant bonus. And it is unclear whether the union would accept a plan that involves payment in company stock, something it has not favored in the past.
“The profit-sharing formula (in the past) was so convoluted, you could be in a situation where the company made a lot of money and the hourlies wouldn’t make much of anything,” Girsky acknowledges. “We need to make sure they feel like they are participating in the economic recovery of the company.
“(We) are trying to give the hourlies the same metrics as the salaried (employees),” he adds. “If (executives) get a bonus based on profit, (market) share, quality, what have you, they should get a bonus based on the same thing.
“It needs to be very transparent, so we all understand when we win and we all understand when we lose.”
Girsky says he favors a stock plan, and notes his compensation at GM is paid 90% in stock, making him highly vested in the success of the company.
“(GM CEO Dan) Akerson is a big believer in pay for performance, and I am too,” he says.
Down the street from the auto show, Akerson told the Automotive News World Congress he also favors a scheme that puts hourly and salaried workers on the same playing field.
“If the company does well, the employees, including our hour union members, will be paid a bonus,” he says. “If they don’t (qualify for a bonus), we don’t.”
Girsky, who in addition to his management duties holds the Voluntary Employment Benefits Assn.’s (VEBA’s) shareholder seat on the GM board, says he is unclear whether the UAW would be more open to profit sharing. The VEBA controls an investment fund financing retiree health-care benefits.
“I don’t know if (the union’s) attitude has changed,” he says, but notes UAW President Bob King is “open to exploring new things.”