Auto Industry Plans to Share More of Their Profits with Employees

auto industryThe American auto industry created a middle class. That started, of course, with Henry Ford's $5 day. Brilliant at business, Ford knew his company would grow bigger and faster if his workers could afford to buy Model-Ts.

After some rough times, especially for the middle class worker it created, the U.S. auto industry may be putting together a new magic act. That could be rewarding each and every member of the work force through profit-sharing rather than rigid union agreements which erode global competitiveness. That's what Bloomberg Business Week is speculating about in terms of next year's labor contract negotiations. The current four-year contract expires September 14, 2011.

That understanding of 'reward' is broad. It covers the sacrifices workers had made in the darkest days of the auto industry. In addition, both the union and the companies now want 'reward' to include incentives to help profits rise and keep costs down. That's the rationale behind authentic profit sharing.

In the past, profit sharing for workers hadn't been too hot. That's what everyone in the loop wants to change. With the new spirit of cooperation, born of a near-death experience, that might finally be possible. And it could reshape the social contract between the American employer and the worker. That's where the magic comes in.

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