DETROIT — The Detroit 3 will collectively write $1.19 billion in 2018 profit-sharing checks to nearly 150,000 hourly workers, capping the most lucrative four-year stretch of bonuses for the UAW rank and file since the automakers agreed to them in 1982. The bonuses total nearly $5 billion since 2015, or about six months' extra pay per worker.
But the checks for 2018, to be paid out by March, amount to the lowest total payout since Ford, General Motors and Fiat Chrysler Automobiles ratified their current deals with the UAW in 2015 and could portend contentious talks — and potential change — this summer and fall as the sides hammer out a new four-year pact.
The industry faces a more uncertain outlook than during the last round of formal bargaining, when Ford and GM were on the cusp of record earnings and the industry was about to set a new mark in U.S. sales. Now, GM is in the midst of closing assembly plants and laying off salaried employees, Ford is undergoing a global restructuring, and FCA is navigating life after the death of CEO Sergio Marchionne, who was instrumental in getting the company out of a net debt position last year for the first time since its bankruptcy.
The sobering realities of a post-peak market could mean lower profits and, as a result, lower profit-sharing checks. That won't sit well with a union seeking additional gains for its members.
While specifics of the UAW's upcoming bargaining strategy are unclear, it could look to change the profit-sharing formula or drop the practice altogether in favor of wage gains that wouldn't fluctuate year to year, said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich.
"I think the membership would much rather have base wage increases with the fact that profits are likely to be smaller going forward," Dziczek told Automotive News. "We're setting up for a showdown this fall."