Employees of Stellantis, maker of Jeep SUVs and Ram pickup trucks, represented by the United Auto Workers will benefit from the removal of a profit-sharing maximum in the 2019 contract and see checks of up to $14,670 before taxes next month.
The payouts are the biggest in more than 35 years. There are 43,000 eligible workers for the checks; the maximum payout is a 83% increase from last year following Stellantis NV's strong results in North America in 2021.
The automaker formed from the merger of Fiat Chrysler Automobiles NV and French rival Groupe PSA announced profit-sharing early Wednesday as part of full-year 2021 earnings. Profit-sharing for U.S. workers is based on Stellantis' North American adjusted operating income margin. It nearly doubled to 16.3% from FCA's 8.9% results in 2020 as the auto industry recovered from pandemic-induced shutdowns but fought supply-chain shortages.
Stellantis last year paid 43,000 employees up to $8,010 in profit-sharing. This year's payouts should appear in eligible workers' March 11 paychecks, according to Stellantis.
Employees receive up to $900 per 1% of profit margin in North America based on individually compensated hours last year. That means employees at plants like the Jeep Cherokee facility in Belvidere, Illinois, with more downtime because of the microchip shortage, may not get as hefty a payout.
"There are still great challenges ahead and the expectations are high, but we know we have a team of talented and engaged people to keep moving the company forward," Mark Stewart, chief operating officer in North America, and other executives wrote in a letter to employees. "Our continued success depends on you coming to work each day, bringing your expertise and imagination to put the customer first."
The results represent an improved formula from the UAW's 2019 contract that went into effect last year. It removed a $12,000 maximum and increased the contributions by $100 per percentage point.
"During the 2019 Collective Bargaining with Stellantis, the UAW bargaining team fought hard for an enhanced profit sharing formula that more fairly distributed profit earnings based on the company's unique structure," UAW Vice President Cindy Estrada said in a statement.
"UAW Stellantis members are proud of the product they create every day especially during challenging environments over the past two years. We continue to make sure that this dedication in the face of pandemic and unforeseen parts shortages is recognized properly.”
In total, Stellantis says it will distribute $2.2 billion (1.9 billion euro) in performance-based benefits for 2021, a 70% increase over the cumulative amount provided by its legacy companies.
“Employees are the heart of Stellantis," CEO Carlos Tavares said in a statement. "It is thanks to their continued focus on execution and excellence that we were able to achieve record results in our first year as Stellantis. Every Stellantis employee took on an extraordinary task in 2021 of combining two automakers while facing serious external challenges. Our goal is that all employees benefit from the company’s profitable growth.”
Stellantis employees represented by the UAW will get the largest payouts compared to its Detroit rivals. General Motors Co. and Ford Motor Co. calculate profit-sharing based on North American earnings. Workers receive $1,000 for every $1 billion their employer earns.
GM will pay up to $10,250 to 42,500 eligible UAW hourly employees compared to $9,000 last year. The Detroit automaker made $10.3 billion in operating income in North America.
Ford's payouts are the smallest. The checks are up to $7,377, more than double its average $3,625 payouts the year before, based on $3.625 billion in earnings before taxes and inflation in North America. Ford has 56,000 U.S. hourly employees, though temporary ones aren't eligible.
