GM Spends $200 Million on Retiree Inflation Bonus; Ford $70 Million

By Staff Report

Dec. 15, 2010

General Motors Co. this week spent more than $200 million to pay a lump-sum inflation bonus of up to $700 to its 267,000 hourly retirees and 72,000 surviving spouses.

Ford Motor Co. expects to pay out more than $70 million next week for the same purpose.

Chrysler Group’s figure was not immediately available.

The payments were required by the master United Auto Worker contracts with the so-called Detroit 3 automakers.

Active hourly employees at GM, Ford and Chrysler won’t get inflation adjustments this year. They gave up a cost-of-living allowance this year and next as part of 2007 and 2009 contract concessions.

GM has 53,000 hourly employees and Ford has 41,000. Salaried employees at the Detroit 3 do not receive cost-of-living allowance payments. GM said this month that its 26,000 salaried employees will not receive raises in 2011 either.

The payments to GM hourly retirees were made Dec. 13, said GM spokeswoman Sherrie Childers Arb.

Hourly retirees fondly refer to the $700 inflation catch-up as “a Christmas bonus” because it comes in December every year. Surviving spouses can receive up to $455.

Dick Danjin, a retired GM employee and one-time UAW International representative, said he would have liked to see active workers get cost-of-living allowance too, in light of GM’s profits and Chrysler’s improved financial performance.

“The companies had a contractual obligation to us,” Danjin said. “It’s a shame, though, that some concessions couldn’t be made to active employees given the state of affairs at GM and Chrysler.”  

Filed by David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail


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