Monday, January 17, 2011

Profit-Sharing Bonuses for Autoworkers

Mark Reuss of GM North American unit says that he's trying to get bonuses tied to profits for autoworkers.
Reuss said the bonus payments wouldn't necessarily be tied to just profits, but could also reward vehicle quality. He's already talked to the new United Auto Workers President Bob King about including it in the new contract when the current pact expires in September. He suggested the union boss is open to such a change.

It's obvious that General Motors and Ford is trying to maximize efficiency from workers to have not just quantity but top quality. What of the people who don't care, are too lethargic, too lazy to try hard, work at minimum efficiency and screw over everyone else? Are there any downs to this new contract that GM is trying to pass in their contracts? Will the efforts and efficiency of the workers create max profit?
Overall, it is a great idea to give bonuses based on profit, but it depends on how GM and Ford choose to manage this. Let's just assume this does work and this helps GM and Ford create more jobs that work the auto line, in the end it'll bring good things to everyone. Jobs will be created for more people as demands increase and GM and Ford can't supply with their current work forces. The workers get payed more because of their max effort; this may strengthen the American dollar as economy gets better if more jobs are created.
As optimistic as this all sounds, there probably are some repercussions to all or some factors that may affect this nice idea. Again it all depends on how GM and Ford choose to manage the given bonuses and what not.


Smith said...

If bonuses are based on profits, then the autoworkers efforts are only part of the equation. What other parts of the equation are there? How could this affect your attitude toward potential bonus if you were an autoworker?

Garrett T. said...

Other parts of the equation are the parts of the car if some parts are defective or made poorly and the way the company chooses to sell their products. To me, if I were to assume that if EVERYONE in the factory did their job perfectly then I would say that it would affect my attitude towards my bonus negatively. I would be working my butt off and I'm not getting a bonus as high as it should be because someone in the higher offices made a wrong decision. Another factor would be the car itself, if it appeals to the masses at all. If it's a car that doesn't make people want to buy it then an autoworker would be working as hard as he could just like anyone else and still the bonus wouldn't be as high as it should because certain cars just don't make enough profit for the company in general.

Elizabeth said...

As said above, it doesn't seem fair that the bonuses are solely based on profits. What about the other people involved? If car dealers are doing an amazing job selling these cars, should the autoworkers alone be rewarded? And profits don't always accurately depict the effort of the autoworkers. The autoworkers could be working very efficiently but a turn in the economy could lead to a decrease in auto sales overall, decreasing profits.