Buffalo Next newsletter Feb. 16: Buffalo Next: What to know about GM and Ford as profit-sharing checks go out

BY MATT GLYNN

FEB. 16, 2022

Buffalo Next

When you think about high-tech manufacturers, the region’s automotive plants may not come to mind.

But maybe they should. Even though the General Motors and Ford plants have been around for decades, they’ve received millions of dollars worth of technology upgrades over the years to keep pace with modern production needs.

Supporting production of electric vehicles will be increasingly important to their future. And if the region’s automotive industry plants manage to remain an active part of the automakers’ production plans, that pays dividends for the employees and the region where they live.

That point is driven home by the profit-sharing checks that General Motors and Ford are preparing to send later this month to eligible workers.

What’s the importance of manufacturing operations to the region?

General Motors has a components plant in Lockport and an engine plant in the Town of Tonawanda. Ford Motor Co. has a plant in Hamburg that stamps metal parts for vehicles.

Those operations have been around for decades, so you may not think of them as advanced manufacturing. But the auto industry plants rely heavily on automation and robotics to make parts for vehicles, and that requires significant investment by the automakers. Case in point: GM recently revealed it will invest $154 million in its Lockport plant to make parts for electric vehicles. GM also plans to add 230 jobs at the Lockport site by 2026.

GM is aiming for an all-electric vehicle lineup by 2035. The automaker hasn’t said how its Tonawanda plant, which makes internal combustion engines, will adapt to those plans.

Meanwhile, Ford at its Route 5 facility makes parts for a wide variety of cars and trucks, including vehicles assembled in Ontario.

What impact do these plants have on the local economy?

GM has 1,314 hourly workers at its Lockport components plant, and 983 at its Tonawanda engine plant. Ford has about 1,000 hourly workers at its Hamburg plant.

While smaller than decades ago, those are still big numbers for a manufacturing plant in 2022, taking into account how much technology is integral to production.

Advanced manufacturing jobs also carry higher wages.

Factory jobs here pay an average of $69,400 a year – nearly 30% more than the average private-sector jobs, according to an analysis of federal employment data by Canisius College economists. Only the financial services and information sectors have higher average wages within the private sector.

Where do the autoworkers’ bonus payments come in?

The United Auto Workers’ contracts with GM and Ford stipulate that UAW members share in the wealth when their employers post successful financial results.

Autoworkers receive $1,000 for every $1 billion in North American profits earned by their employer before interest and taxes. For that reason, the full-year results are closely watched when the numbers are released early in the year.

GM workers will receive pretax payments of up to $10,250, while Ford said its profit-sharing checks will go as high as $7,377. 

GM says 42,500 of its hourly workers are eligible for profit-sharing checks, but wouldn’t specify how many of them work at the two local plants. They will receive the payments with their Feb. 25 paychecks.

Since 2015, eligible hourly employees at GM have received over $72,000 each in profit sharing payments, said Daniel Flores, a GM spokesman. “The results we are achieving today are helping secure a strong future for all of our employees.”

The amount of the profit-sharing checks fluctuate from year to year. GM’s profit-sharing checks for 2020 were as high as $9,000, while Ford’s topped out at $3,625. The automakers’ 2020 output was disrupted by temporary factory shutdowns due to the pandemic.

For both GM and Ford, the payments for 2021 are the highest since 2018.

Catch up on more:

• With big investment on the way, GM’s Lockport plant carves out niche in the automaker’s future

• GM gives $154 million vote of confidence to Lockport plant

• At green construction equipment maker, new leaders move on from fossil fuel

Welcome to Day 4 of Buffalo Next. This new newsletter from The Buffalo News will bring you the latest coverage on the changing Buffalo Niagara economy – from real estate to health care to startups. Read more at BuffaloNext.com.

Five reads from Buffalo Next:

1. After a ‘gray tsunami,’ manufacturers have an acute need for new workers: Long before Covid-19, manufacturers were coping with a worker shortage. They talked about the “gray tsunami,” a wave of workers rolling toward retirement age and not enough young people filling those vacancies. Here’s how manufacturers hope to solve the problem.

2. What is ImmunityBio and why should you know the name?: A California immunotherapy company controlled by a billionaire biotech entrepreneur took over the lease for a $200 million Dunkirk manufacturing plant built by New York State. Here’s what you should know about the deal.

3. Why Moog’s John Scannell sees a new frontier: The Elma company wants to get in on the push to make electric construction vehicles. CEO John Scannell thinks the business is a good fit.

4. Investment firm takes stake in New Era Cap: ACON Investments, a private equity investment firm, has taken a 15% to 20% stake in the Buffalo-based company, as ACON converted company debt to equity.

5. Business People: See who’s moving up in the Buffalo Niagara workforce

The Buffalo Next team gives you the big picture on the region’s economic revitalization. Reach Matt Glynn at mglynn@buffnews.com.

Email tips to buffalonext@buffnews.com.

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