March 10, 2005
Chrysler, Ford to reward bonuses for profitable 2004
Detroit, Michigan – Nearly 10,000 managers at DaimlerChrysler AG’s Chrysler Group will receive bonuses in May as a reward for a profitable 2004, a company spokesman said Tuesday.
The bonuses will go to 9,400 entry- to mid-level managers in all departments, said spokesperson David Elshoff. He said the bonus amount hasn’t been determined, but will be a percentage of the manager’s salary based on corporate profits, warranty service costs and other factors, as well as individual performance reviews.
The bonuses are expected to be roughly 8.5 per cent of salary and likely will be substantially higher than the US$1,500 profit-sharing cheques Chrysler is distributing this month to hourly and administrative employees. Elshoff said it is because Chrysler’s managers are responsible for continuing the company’s turnaround. “These are the people who will shoulder a good deal of the burden in continuing to drive us to a leadership position,” he said.
Chrysler made a profit of US$1.9 billion in 2004, after reporting a loss of US$637 million the year before. Elshoff said the bonus plan for managers was approved in 2003 but none were paid last year because of the company’s 2003 performance.
The bonus plan for managers differs from that of executives, who are also expected to get healthy payouts this year. For managers, only Chrysler’s performance is taken into account; executive bonuses are based on the performance of parent company DaimlerChrysler AG.
Ford Motor Company is also planning to distribute modest bonuses to managers this year. Ford earned a pretax profit of US$850 million in 2004.
Spokesperson Marcey Evans would not reveal the amount of the bonuses, but said that about 6,100 managers from entry-level to executive positions will get one type of bonus, while roughly 34,500 lower-level salaried employees in the U.S. and Canada will get another. All employees will also be eligible for merit raises.
Ford is also providing US$600 profit-sharing cheques to hourly employees.
General Motors Corp. spokesman Mark Tanner said the company won’t disclose any information on corporate bonuses until it files a proxy statement with the U.S. Securities and Exchange Commission in April. GM is distributing US$195 profit-sharing cheques to hourly employees this month.