Toledoan Gilbert Willis knows exactly what he's going to do today: shop for a 2004 Chrysler Sebring automobile.
The search is being spurred by the delivery of $3,000 bonus checks that are part of a four-year contract with DaimlerChrysler AG recently ratified by Chrysler workers nationwide, including the 1,780 hourly employees at Toledo Machining in Perrysburg Township.
“I'm going to take advantage of that deal where you put $2,000 down and get to drive a car for a year for free,” said Mr. Willis, an eight-year veteran at the facility. “It's a pretty good signing bonus.”
Seven autoworkers with the same idea are taking delivery today on new 2004 vehicles at the Monroe Dodge Chrysler Jeep Superstore, sales director Ralph Mahalak, Jr., said.
The offer to get into a vehicle for $2,000 (or about what the bonus check is after taxes) runs through Nov. 10 and is open only to autoworkers and their children living at home, he said. At the end of the 12 months, they can buy the vehicle or turn it in.
About 300,000 workers nationwide at plants owned by DaimlerChrysler, General Motors Corp., Ford Motor Co., and parts suppliers Delphi Corp. and Visteon Corp. each will get a $3,000 signing bonus this week or next week as part of the new national contracts with the United Auto Workers. That amounts to a $900 million payout.
Part of the contract also provided for Christmas bonuses of up to $600 each. Christmas was on the mind of Mark Young of Genoa, who has worked at the Toledo Machining facility for eight years.
“Most of it's going to taxes, but I'm going to spend [the rest] on Christmas shopping.”
The lump-sum bonuses, coupled with lower withholding amounts for federal income taxes, should make this holiday season brisker than in recent years, said David Littmann, chief economist of Comerica Bank in Detroit.
He estimates that two-thirds of workers receiving the bonus will spend it. There are 13,800 UAW workers at six Big Three plants in northwest Ohio and 160,000 at plants in Michigan.
“Because of its size, it will be mostly spent for larger-ticket goods, from vehicles to big-screen TVs,” Mr. Littmann said.
Not everyone interviewed at Toledo Machining is thinking quite that big, however, as the plant has until March to become more cost-competitive or risk being sold or closed.
Perrysburg Township resident David Simon, an 18-year employee, said he may buy some college tuition credits for his high-school senior child, but probably will end up saving most of the money. “We have no idea what's going to happen after March, so you have to be a little bit cautious,” he said.