It was hardly ideal timing: DaimlerChrysler's
announcement of profit-sharing bonuses for its German workers came
just as many Chrysler employees in the United States are worrying
whether they'll still have jobs at all.
In the face of such harsh evidence of the split fortunes at
Germany's most visible global company, DaimlerChrysler opted not to
even publish the announcement in English. But in Germany, the
payments were seen Friday as a natural reward for good work.
"It makes no sense to punish the successful workers at Mercedes
because things aren't going well at Chrysler," said Christian
Breitsprecher, an automotive analyst for Deutsche Bank.
The $1,470 bonus for DaimlerChrysler's 140,000 workers in
Germany was absolutely routine, company spokesman Marc Binder said.
It was the highest-ever bonus for the company's German side, up
from $1,320 last year.
Those amounts actually pale in comparison to past bonuses
received by workers for Chrysler, who got payments averaging $8,100
This year, Chrysler hasn't yet said how much it will be giving
its employees, but analysts expect the sum to be much lower given
the poor results at Chrysler that have dragged down
DaimlerChrysler's overall showing.
"Even if it was the same amount as being distributed to the
German employees, it's still a tremendous drop," said John
Revitte, a professor at Michigan State University's School of Labor
and Industrial Relations.
"I don't imagine that will go around very positively at
Chrysler factories," he said.
All the more poignant, the bonus announcement came a day after
the company posted large operating losses for last year, with its
U.S. arm weighing down the bottom line. DaimlerChrysler did not
release specific numbers for each division, but its German
operations are expected to show a strong earnings performance when
figures are revealed Feb. 26.
Chrysler is expected to unveil fourth-quarter losses of at least
$1 billion along with a turnaround plan by new head Dieter
Zetsche. Zetsche said last month he would cut 26,000 jobs over
Although the idea of a trans-Atlantic "merger of equals" has
been disproved as German executives took over ailing Chrysler,
there's also simple logistical reasons why the two halves aren't
the same the vastly different labor environment in the two
German workers generally get lower profit-sharing bonuses. But
unlike their American counterparts, they receive an additional
"Christmas money" bonus in November, set in their contracts as 55
percent of a month's pay. Auto workers in the United States instead
get paid time off over the holidays when factories typically shut
"It's completely different, the systems in Germany and the
United States," said DaimlerChrysler's Binder.
Erich Klemm, who represents DaimlerChrysler employees on the
company board, said he was happy management had decided to link
profit-sharing payments to earnings for workers at the
Mercedes-Benz passenger car, Smart compact-car and truck divisions
and not to overall profits.
In announcing the bonuses, there was simply no consideration of
how the numbers might affect worker morale across the Atlantic,
spokesman Binder said.
"We have to announce those figures because our employees expect
the figures," he said.
It was actually a then-struggling Chrysler that was one of the
first automakers to introduce profit sharing 20 years ago.
For years, workers at other companies have looked on jealously
at Chrysler's higher bonuses made possible because it has fewer
workers, Revitte said. The bonuses at General Motors Corp., the
world's largest automaker, reached an all-time high last year of
Now that things have turned sour again at Chrysler, the bonuses
in Germany could be another sore point in growing resentment about
the 1998 merger, Revitte said.
In Detroit "there's a lot of blame to the Germans for ruining a
good company," he said.