United Autoworkers (UAW) union members who work for Fiat Chrysler Automobiles N.V. (NYSE: FCAU) will be getting profit-sharing checks in amounts of up to $4,000 as a result of the company’s 2015 financial performance. That’s an increase of 45% to the 2014 payment of $2,750, according to the company.
The terms of the profit-sharing agreement were negotiated in the collective bargaining agreement Chrysler and the union signed late last year. The UAW also signed new four-year contracts with Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM), but neither has announced 2015 profit-sharing payment amounts yet.
In late November 2015, Ford said it would take a charge of $600 million to pay for the new contract with the UAW. The expense was primarily associated with the contract ratification bonus that Ford agreed to pay if the union agreed to the new contract. Some 53,000 Ford workers received a $10,000 signing bonus, which includes a $1,500 advance payment on 2016 profit-sharing. According to Ford, the ratification and lump sum bonus payments only increase labor costs by less than 1.5% a year, which is less than the forecast rate of inflation over the four-year contract term.
Chrysler paid signing bonuses of $3,000 or $4,000 to each UAW member, depending on the employee’s hire date. GM paid $8,000 per worker.
Chrysler’s stock traded down about 0.5% in the early afternoon Wednesday, at $7.57 in a 52-week range of $6.60 to $11.24.