(Bloomberg) General Motors Co. and Chrysler Group LLC, which each received government-funded bailouts, may award some managers bonuses of as much as 50 percent of their salary, said four people familiar with the plans.
GM plans to pay bonuses to most managers equal to 15 percent to 20 percent of their annual salary and as high as 50 percent to less than 1 percent of its 26,000 U.S. salaried employees, said one of the people, who asked not to be named revealing internal plans. Bonuses for Chrysler’s 10,755 salaried workers will average about $10,000, with a small group getting as much as half of their salary, one of the people said.
The payouts come as GM, Chrysler and Ford Motor Co. prepare for contract talks this year with the United Auto Workers, which is seeking a share of the industry’s growing prosperity. Ford, the only U.S. automaker to avoid bankruptcy in 2009, is expected to pay bonuses equal to 10 percent or more of base pay to some salaried staff, said a person familiar with the plan.
“The union is going to be very angry about this,” Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts, said in an interview yesterday. “If these kinds of bonuses are paid to salaried workers, then the union’s demands will increase, knowing management can’t claim an inability to pay.”
Chrysler’s bonuses may be paid as soon as today, one of the people said. Bonuses for GM’s salaried workers without management duties may be as low as 5 percent of their annual pay, one of the people said.
GM reorganized in bankruptcy in 2009 with $49.5 billion in government aid, while Chrysler got $12.5 billion in assistance for its reorganization that year. Each is subject to pay restrictions for top executives after receiving funding from the U.S. government’s Troubled Asset Relief Program, which also aided banks.
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