February 14, 2017
Is Big Auto on its way back?
A few years ago U.S. automakers were having so much trouble selling cars they not only needed a government bailout, they needed cash to help buyers afford trade-ins. The industry was in dire straits. No one was saying it was on the way out, but things were very grim and not looking much better. Then came the turnaround.
The economy continued to tick upward, and cars started selling again. Bailout cash was paid back, and, thanks in part to major foul-ups from big foreign brands, the outlook for American automakers started looking really rosy.
A recent story by CNN said, as a reward for a job well done, upwards of 150,000 US auto workers earned thousands in bonuses. On average, these workers took home about $8,600. This payout is part of a profit-sharing payment General Motors is distributing to factory workers. The top end of the bonus payout is about $12,000, a not too shabby “thank you” for a job well done.
This is especially good news for General Motors, which has not had the easiest past few years. Coming out of the Recession and the downturn in the auto market, GM landed in the headlines thanks to a faulty ignition issue that caused many deaths. The company was in the headlines again and again, with each negative story turning away customers and hurting sales.
But GM kept working, kept focused on global distribution and trying to win back American audiences. Meanwhile, the company found a massive and ready market in China, helping GM achieve the heights of selling more than 10 million cars.
But GM was not the only American company spreading the wealth. Tens of thousands of Fiat Chrysler workers will receive several thousand in their paychecks as well. According to CNN, that bump will be about $5,000, up 25% from this time last year.
Meanwhile, Ford Motor Company will distribute an average of $9,000 to more than 50,000 workers.
And the good news keeps coming. UAW leadership says they’ve heard from the brass at the top three automakers, who all committed to continue investing more in American manufacturing. Ford, for example, made big news with plans to expand multiple U.S. plants as it shifts manufacturing of some SUVs and light trucks.
Ford and GM are both betting big on automation too. Not just in factories, which will cut costs, but also in so-called “driverless” cars, which all involved expect to be the next evolution in American passenger cars.
So, good news all around … but good news does not necessarily signal a trend. There are still a lot of hurdles, a lot of ground that needs to be made up and a lot of people still choosing foreign-made brands over their domestic counterparts.