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GM To Give $10,750 In Profit Sharing To Employees Amidst Drop In Earnings


02/06/2019


GM To Give $10,750 In Profit Sharing To Employees Amidst Drop In Earnings
A profit share valued at $10750 would be given to each of the UAW-represented workers this year, announced the US auto maker General Motors even as the company is under pressure after it announced a significant number of white collar job losses  across North America earlier in the week.
 
Compared to the profit sharing checks of $11,750 last year, the value this year is lower primarily because basis of the amount is pretax profits, or earnings before interest and taxation from its North American operations.
 
There has been a drop in 2018 in the North American pretax profit for the company at $10.8 billion – lower than the $11.9 billion the company reported in 2017.
 
Globally, the auto maker noted a 8.3 per cent year on year drop in pretax profits in 2018 at $11.8 billion. According to the Detroit based company, the primary factors that drove its pretax profits include record average transaction prices in the U.S., very good sale of SUVs and the launch of the 2019 redesigned Chevrolet Silverado and GMC Sierra pickup trucks.
 
The company beat analysts’ expectations in revenues for the entire year globally clocking at $147 billion against consensus estimates of $142.3 billion which was a 1 per cent rise year on year.  
 
The company performed well in China despite a record performing year of the auto sector in the country this year. GM said that the Chinese market reported equity income of $2 billion for 2018 which were in line with the amount it reported in 2017 and 2016. There was 17.2 per cent year on year increase in sale of Cadillac in China. For GM Financial,  a record full year revenues of $14 billion was also reported a 58 per cent year on year over last year increase in adjusted income at $1.9 billion for the same period.
 
This year, the company would make more "bold decisions", said GM CEO Mary Barra despite the strong numbers.
 
"GM delivered another strong year of earnings in a highly volatile environment in 2018," Barra said in a statement. "We will continue to make bold decisions to lead the transformation of this industry and drive significant shareholder value."
 
There was a drop in pretax profits for North America for the entire of 2018 at $10.8 billion compared to $11.9 billion a year ago. Consequently according to Nasdaq, the company reported a 1.2 per cent drop in its earnings per share at $6.54 and yet beat estimates of the Wall Street which was pegged at $6.30 per share.
 
Despite the drop in the amount of profit sharing cheques for its almost 46,500 UAW-covered workers, the value was higher than the $7600 being declared by its GM rival Ford.  
 
GM said that more $80,500 each in profit sharing has been earned by eligible workers of the company since 2010.
 
The company has however been criticised for its announcement of cuts in white collar jobs as the company focuses on a shift from being a traditional auto company to a technology based one with plans to bring out a host of electric vehicles.
 
"GM's CEO Mary Barra is clearly not timid about making bold decisions to implement radical change, whether it be forging new technologies or the gut-wrenching shuttering of factories," wrote David Kudla, CEO and chief investment strategist for Mainstay Capital Management in his investment note. "GM is ahead of the pack when it comes to restructuring the business to focus on the future of (electric vehicles) and autonomous."
 
He warned, "2019 will be a pivotal year for GM" as the company takes drastic steps to "convert from (internal combustion) to electric. It's a huge bet."
 
(Source:www.freep.com)


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