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GM Bonuses for Line Workers Biggest Ever

Monday, 14 Feb 2011 | 11:11 AM ET
Auto worker works on assembly line at GM Lansing Grand River plant.
AP
Auto worker works on assembly line at GM Lansing Grand River plant.

What a difference a couple of years make.

Two years after seeing their company slide into bankruptcy, GM hourly workers will get the biggest bonus the company has ever paid out to its line workers. While the final payout will be announced later this month when GM reports fourth quarter earnings, but the bonuses will be at least $4,000 per worker.

The year-end bump is more than double GM's previous high for an annual bonus. That happened in the late 90's.

Given the federal government has a stake in GM, there will be plenty of questions about the size of the payout and whether GM should be paying bonuses shortly after coming out of bankruptcy. I've already heard a few people make comments. Personally, I have no problem with the payments.

The bonus program and formula were set in accordance with GM's plan for coming out of bankruptcy. And with the company now back in the black, it's time to pay the workers (by the way, GM salaried employees are getting bonuses of between 4-16% of their pay). GM is joining Ford and Chrysler in paying out bonuses.

For those who think GM salaried and line workers should not get bonuses, keep in mind the folks at the country's largest automaker have already taken a substantial hit as their company went through bankruptcy. That's not to say they are entitled to a bonus, but it is to point out they paid a price going through Chapter 11 and now that GM is profitable, they should get what the company's board thinks is fair. If the bonus program is out of line, shareholders should tell the board.

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___________________________ Questions? Comments? BehindTheWheel@cnbc.comand Follow me on Twitter @LeBeauCarNews

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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