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Valley economy to get $30M lift from GM profits, workers to get $6,750



Published: Fri, February 15, 2013 @ 12:16 a.m.

US shows recovery as Europe slides; Lordstown workers to get $6,750 each

By Jamison Cocklin

jcocklin@vindy.com

LORDSTOWN

Gains in North America were not enough to offset heavy losses in Europe for General Motors Co., but 2012’s profit still means an influx of more than $30 million for the Mahoning Valley’s economy — as Lordstown’s 4,500 workers will each receive $6,750 in profit sharing.

GM on Thursday posted a profit of $4.9 billion for 2012, down 36 percent from a year earlier, when it made $7.6 billion. Its net income fell because of European losses and a truckload of one-time accounting gains and losses in both years. Last year’s pretax profit, which excludes the one-time items, still dropped, but only by 5 percent to $7.9 billion. Revenue for the year rose 1 percent to $152.3 billion.

The company’s money machine, North America, made $6.9 billion before taxes for the year. But GM lost almost $1.8 billion in Europe, where it has too many factories and workers as sales slow in a faltering economy.

“It shows a strong recovery here when you look at North America. Right now, it’s the most profitable part of the company’s business,” said David Green, president of United Auto Workers Local 1714 at Lordstown.

“There’s clearly issues in Europe, but we have no ability to impact that, especially locally.”

The earnings in North America mean big bucks for GM’s 50,000 U.S. factory workers, who agreed to take profit sharing over pay raises in 2011 contract talks. The workers represented by the United Auto Workers union will get $6,750 each, down a little from $7,000 last year.

“There’s no telling what the trickle effect of that kind of money can do for our economy,” said Glenn Johnson, president of UAW Local 1112, also at Lordstown.

“It’s a huge influx of dollars into our community and when those kinds of numbers are tossed around, it helps to create and sustain jobs in other parts of the economy.”

Johnson said he expects workers at Lordstown to receive their profit share sometime in March along with their regular paychecks.

The European losses widened by more than $1 billion . They also wiped out the combined $1 billion made by GM’s auto loan and South American businesses, plus part of the $2.2 billion made by international operations.

Just about every auto- maker is seeing sales fall and losses mount in Europe as the economy there continues to unravel.

Still, GM executives are optimistic that cost-cutting and 23 new vehicles by 2016 will help Europe break even before taxes by the middle of this decade.

One of those new vehicles will be the Chevrolet Cruze diesel, which will hit the market this summer. Workers at Lordstown have been assembling test models for months now.

“The Cruze has been selling steadily,” Johnson said. “Anything that can enhance and give our customers another option is always a good thing, and the diesel Cruze certainly does that.”

The Associated Press contributed to this story


Comments

1chuck_carney(499 comments)posted 1 year, 7 months ago

This was money which should have gone to the retiree bondholders whose investment was wiped out.

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2juggygails(24 comments)posted 1 year, 7 months ago

Ok so when GM employees get a bonus it called a "boost to the local economy" but when public employees get bonuses in years when budgets are in the black it is pigs at the trough. The Vindy is starting to sound like Fox News.

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3UsuallyBlunt(105 comments)posted 1 year, 7 months ago

The profits to G.M. that allow these bonuses come from monies paid willingly by consumers for products!

The "bonuses" JUGGYGAILS refers to come from excess taxes TAKEN from citizens!

HUGE DIFFERENCE!

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4busyman(239 comments)posted 1 year, 7 months ago

These great profits were made on the backs of the Delphi and GM Salary employees as they sold them down the river with reductions in pensions and health care benefits. And let us not forget the government loans funded by taxpayers money that have not been completely paid back yet.

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5papa1(661 comments)posted 1 year, 7 months ago

i hope the people who were hired at half the pay as the older workers get were given the same bonus, or did they get half? and do they pay the same union dues as those making twice as much? they shouldn't, they should pay half. i agree with busyman, this money was paid after screwing thousands of delphi workers and retirees out of healthcare and pensions. way to go generous motors!

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6treeman41(2 comments)posted 1 year, 7 months ago

Usuallyblunt hit it right on the nose,

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7treeman41(2 comments)posted 1 year, 7 months ago

Papa1all the non management workers with eligible time get the same amount and every worker pays one hour of pay a month to the union dues, so different pay scale different due rates

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8mlisi39(47 comments)posted 1 year, 7 months ago

If these were YSU employees getting these checks... the Vindy would be crucifying them.... but since it's lordstown it's ok.....

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9busyman(239 comments)posted 1 year, 7 months ago

You are right mlisi39. They need to pay off their government loans before they give any profit sharing to the employees. It is time to get Judge Judy involved so she can tell GM to pay the taxpayers. As GM shed more of their legacy cost to Social Security, Medicare and selling the salary pensions to Purdential future profits will rise. They have learned well from their competitors from the rising sun. No more legacy cost!! Word is that they are coming after the UAW retires pension to sell that to purdential. They will eventually say Sayonara to all legacy cost and with the remaining workers making half the hourly rate, you will think working at Walmarts is the better road.

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10papa1(661 comments)posted 1 year, 7 months ago

remember dinah, "see the usa in a chevrolet?" if gm rids itself of all legacy costs i hope their us sales go the same way dinah went.

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11redgpgtp(37 comments)posted 1 year, 7 months ago

Funny how they keep publishing this every year and saying how this money they get will boost the economy of the valley when they have no idea how each employee will spend it. Hell, they may put it away in stocks, bonds, or savings.

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