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Automobile-sector employees expect fat red envelopes

Compared to other traditional manufacturing segments, the auto-making sector is expected to cash in a big "red envelope" as an improved economy has eased consumers' caution about spending on luxury goods like new cars, an industry watcher said yesterday.

"Employees at Yulon Motor Co (裕隆汽車), China Motor Corp (中華汽車), Hotai Motor Co (和泰汽車) and Sanyang Industry Co (三陽工業) should expect the biggest bonuses this year due to higher profits," said Frank Tsai (蔡祐文), an analyst at SinoPac Securities Corp (建華證券).

But among the above-mentioned four companies, Hotai Motor, the biggest car maker in Taiwan by vehicle sales, may give smaller bonuses, Tsai said.

Fat year-end bonuses are not expected to continue next year.

"Yulon, which has a big portion earnings form its Chinese units, will suffer a significant setback in earnings due to increasingly fierce competition in China," Tsai predicts.

Yulon may offer more than five-month's salary as year-end bonus this year because of better-than-expected earnings, said Wu Hsin-fa (吳新發), spokesman of Yulon Nissan Co (裕隆日產), a spin-off unit of Yulon Motor Co.

Yulon's first 10-month earnings jumped 86.72 percent to NT$7.53 billion, which nearly doubled its full-year per-tax earning target of NT$4 billion.

China Motor, a joint venture of Yulon Motor and Mitsubishi Motor Corp of Japan, however, said it is likely to keep the bonus payment similar to that of 2002 despite a jump in earnings from its Chinese joint venture Southeast Motor Corp (東南汽車).

"Our calculation base doesn't include earnings from non-core business," China Motor Spokesman Hsu Li-min (許利民) explained. China Motor workers received additional six-month's salary payment for year-end bonuses last year, according to Hsu.

Ford Lio Ho Motor (福特汽車), the local joint venture in which the US automaker has a 70 percent stake, said 2003 bonuses will remain at a similar level with that of last year -- 4.5 months salary -- while DaimlerChrysler Taiwan Ltd may see a reduction in bonus this year as profitability eroded due to a strong euro against the US dollar.
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