Profit Sharing in Industry

December 12, 1962

Report Outline
Innovations in Labor Remuneration
Place of Profit Sharing in Industry
Potential Effects of Profit Sharing

Innovations in Labor Remuneration

Employees of the American Motors Corporation recently received their first annual allotment of benefits under a profit-sharing arrangement agreed to by the company in negotiations with the United Automobile Workers in 1961. The plan, first of its kind in the automobile industry and first to be established under a labor contract with so large a corporation, is being watched closely as holding a possible clue to future patterns of wage policy in major industries. In the opinion of some observers, the scheme constitutes a promising approach to satisfaction of labor demands by non-inflationary means. Others view it as no more than a noteworthy addition to thousands of other profit-sharing arrangements in American industry.

Which of the foregoing contentions is the more valid may depend to a large extent on experience under the American Motors plan during the two years remaining before expiration of the current labor contract on Oct. 15, 1964. That experience may determine also whether U.A.W. President Walter P. Reuther goes through with his recently stated intention to seek similar profit-sharing arrangements with General Motors, Ford and Chrysler when their labor contracts come up for renegotiation in 1964.

Details are expected to be made known before the end of this year about another type of profit-sharing plan which may be adopted for employees of the Kaiser Steel Corporation. The plan is being worked out by a so-called “Fruits of Progress” committee established under the Kaiser-United Steelworkers contract negotiated in 1959.

ISSUE TRACKER for Related Reports
Profit Sharing
Dec. 12, 1962  Profit Sharing in Industry
Mar. 12, 1958  Profit Sharing and Union Strategy
Feb. 23, 1946  Sharing Profits in Industry
Sep. 09, 1938  Profit Sharing for Wage Workers
Employee Benefits
Unions and Labor-Management Relations