Group 1 Automotive Inc. will give $500 bonuses to non-management dealership employees out of money it will save from the tax overhaul passed by Congress and signed by President Donald Trump last month, the nation's third-largest dealership group said Friday.
About two-thirds of the 10,000 employees at its 115 dealerships nationwide will be eligible for the cash bonus, said Pete DeLongchamps, senior vice president at Group 1.
The idea was to give some of the tax savings to "the people that are on the front lines" of dealerships operations and to say "thank you for all of your hard work," DeLongchamps told Automotive News.
"This is clearly what the president and the Congress had in mind," he said, when they passed corporate tax relief: giving back to employees. The one-time bonus will be paid out on March 1.
Group 1 joins Fiat Chrysler, Walmart and several banks and airlines in distributing employee bonuses from tax savings. The tax law reduced the corporate tax rate from 35 percent to 21 percent.
DeLongchamps said allocating the bonus money for employees was balanced with shareholder value and other opportunities that the tax break will give the dealership group in the new year.
"Group 1 is assessing the full impact of the tax reform law on the company's operations," the company said in a statement. More details will be shared when 2017 earnings are announced next month, it said.
Group 1 CEO Earl J. Hesterberg said in the statement: "As we were in the process of reviewing the opportunities the new tax reform law creates for us to better our business, we decided the best investment we could make was in the people serving as the face of our company every day."
Group 1, of Houston, ranks No. 3 on Automotive News' list of the top 150 dealership groups based in the U.S., with retail sales of 172,053 new vehicles in 2016.