NUA Strategy for Automotive Industry Employees (Ford, GM, Stellantis)

Long-tenure employees at Ford, General Motors, and Stellantis (formerly FCA/Chrysler) are natural NUA candidates: 25–35-year careers with employer match contributions in company stock, defined benefit UAW pensions that cover living expenses without forcing immediate stock sales, and for Ford employees who accumulated shares during the 2008–2011 period, appreciation ratios of 4:1 to 10:1+ that produce meaningful lifetime federal tax savings. But the auto industry has two layers of complexity that don't exist in most other sectors: the 2009 GM and Chrysler bankruptcies, which reset employer stock basis to zero for pre-bankruptcy shareholders and make "new GM" and "new Stellantis" NUA analyses fundamentally different from what long-service employees expect, and Michigan's flat 4.05% income tax, which treats long-term capital gains identically to ordinary income — eliminating the state-level NUA advantage that employees in Texas, Florida, or Washington capture. The federal NUA benefit remains real and substantial in Michigan and Ohio regardless; the state factor simply doesn't add to it.

Why automotive employees are NUA candidates

Several structural features of Big Three careers produce favorable NUA conditions:

• Long tenure with early cost basis. Assembly workers, engineers, and skilled tradespeople at Ford, GM, and Stellantis routinely spend 25–35 years at a single employer. Employer match contributions made in the 1990s and early 2000s — and especially during the 2008–2011 crisis period when Ford stock touched a low around $1–$2/share — carry cost basis well below current market prices. A Ford employee who received significant employer contributions between 2009 and 2012 can hold shares with a blended basis of $2–$4/share versus a current market price substantially higher.
• Employer match funded in company stock. Ford's Tax-Efficient Savings Plan (TCESP), GM's Savings Plan, and Stellantis's U.S. 401(k) plan each allow — or have historically allowed — employer matching contributions to be made in company stock. These continuous contributions, made over decades at progressively varying market prices but with a cost basis reflecting the match date, can create a portfolio where current market value is several multiples of accumulated basis.
• UAW defined benefit pensions reduce forced-sale pressure. UAW hourly workers at Ford, GM, and Stellantis receive defined benefit pension income that covers basic living expenses in retirement. Because the pension pays the bills, NUA stock doesn't need to be liquidated immediately after distribution. This creates the tranche-selling opportunity — selling NUA stock in annual tranches of $40,000–$80,000 while staying within the 0% or 15% federal long-term capital gains bracket.
• The 2009 crisis created a once-in-a-generation cost basis opportunity — for Ford specifically. Ford Motor Company did not file for bankruptcy during the 2008–2009 financial crisis, unlike its domestic competitors. Ford stock traded as low as approximately $1.01/share in January 2009. Employees who continued receiving employer match contributions at those prices now hold shares with a very low basis. For employees whose contributions were concentrated in 2009–2012, the appreciation from those years alone drives most of the NUA savings.

Major auto employer 401(k) plans

Plan structure, recordkeeper, and employer stock investment options can change. Verify with your current HR benefits portal or Summary Plan Description before making any distribution decisions. The in-kind distribution availability must be confirmed in writing from the plan administrator for your specific plan document — not all plans within these systems allow in-kind stock transfer.

Ford Motor Company: the cleanest NUA case in auto

Of the three domestic auto manufacturers, Ford presents the most straightforward NUA opportunity because Ford did not file for bankruptcy during the 2009 financial crisis. Shareholders maintained continuous ownership of publicly traded Ford (ticker: F) stock throughout — there was no reorganization, no share cancellation, and no reset of cost basis. An employee who received employer match contributions in Ford stock from 1993 through 2026 holds shares with a single uninterrupted cost basis chain, all traceable through Fidelity NetBenefits.¹

Ford's stock history and what it means for NUA ratios

Ford stock's price history creates a distinctive NUA profile: the company has not been a consistent long-term outperformer, but it experienced an extraordinary low during the 2008–2009 financial crisis that left contributions made during that window with very low cost basis.

• 1990s contributions (split-adjusted ~$6–$12/share range): Ford traded in a relatively narrow range through much of the 1990s. Contributions made in this decade have a moderate basis versus current prices.
• Early 2000s (split-adjusted ~$6–$15/share range): Ford faced quality and profitability challenges. Contributions made at this time carry basis in a similar range.
• 2008–2011 crisis era (approximately $1–$4/share): This is the source of the most dramatic NUA ratios at Ford. Employees who were actively contributing — or receiving employer match contributions — during the depths of the crisis accumulated shares at prices that are now well below current market value. Contributions made at $1.50–$3/share when Ford now trades at $10–$14/share represent 4:1 to 9:1 ratios on those specific lots.
• Post-2012 contributions (~$10–$18/share): More modest appreciation from contributions made as Ford stabilized. These lots have lower ratios and contribute less to the NUA benefit.

The result is a blended cost basis across all lots that depends heavily on when in the employee's career the most shares were accumulated. A Ford engineer who joined in 2000 and contributed steadily through 2026 might have a blended basis of $4–$7/share on stock that currently trades at $10–$14 — a 2:1 to 3:1 ratio that produces a modest but still real federal NUA advantage. An employee who received substantial employer match contributions during 2009–2012 will have a much lower blended basis and a more compelling NUA case.

Ford TCESP mechanics

Ford's Tax-Efficient Savings Plan is administered by Fidelity Workplace Investing. In-kind stock distributions follow Fidelity's standard in-kind transfer process: the participant must call Fidelity Workplace Investing (not the retail Fidelity line) and specifically request an in-kind transfer of Ford shares to a taxable brokerage account. The plan must confirm that in-kind distribution is permitted under the plan document. Fidelity will report the distribution on Form 1099-R with the NUA amount in Box 6.²

For detailed Fidelity mechanics — the exact call language, the December 31 same-year lump-sum deadline, and how to read your 1099-R Box 6 — see Fidelity NUA Distribution Mechanics.

General Motors: post-bankruptcy NUA dynamics

General Motors filed for Chapter 11 bankruptcy protection on June 1, 2009. This event fundamentally changed the NUA analysis for GM employees in ways that are still not well understood by generalist advisors.³

Old GM vs. new GM: a complete break in cost basis

Shareholders of "old GM" — the company that filed bankruptcy — had their shares cancelled as part of the reorganization plan. Old GM shares became essentially worthless. There was no exchange of old GM shares for new GM shares at a favorable ratio as there was in some corporate restructurings. Employees who held old GM stock in their 401(k) plan saw those shares extinguished.

"New GM" (General Motors Company, ticker: GM) was a legally distinct entity that emerged from bankruptcy. It issued new shares, with the U.S. Treasury and other creditors receiving the new stock. New GM completed its initial public offering on November 18, 2010, at $33 per share.³

What this means for NUA:

• Pre-bankruptcy GM employees whose shares were extinguished have no NUA opportunity tied to old GM stock — those shares are gone.
• Employees who remained with GM post-bankruptcy and began accumulating new GM stock through employer match contributions starting in late 2010 have cost basis dating to the November 2010 IPO price of $33/share or to their specific lot purchase prices after that date.
• With 14–15 years of new GM accumulation (2010–2026) from an IPO price of $33/share, the appreciation ratio depends on current GM stock price. GM has traded in a range from approximately $20 to $60+ since its IPO, with meaningful volatility. Employees with substantial accumulation at prices below $30 (which occurred in 2012 and again in 2015–2016) may have moderate appreciation ratios worth modeling.
• A 30-year GM employee who joined in 1994 and retired in 2024 has two entirely separate periods: pre-2009 contributions that went to zero, and post-2010 contributions to new GM that carry current basis. The NUA analysis is based entirely on the post-2010 position.

GM Savings Plan mechanics

The GM Savings Plan is administered by Fidelity Workplace Investing (post-bankruptcy; prior administrators are no longer relevant for living participants). The in-kind distribution process follows standard Fidelity mechanics. See Fidelity NUA Distribution Mechanics. GM employees should confirm that their specific plan document allows in-kind stock distribution, as plan terms can vary between hourly and salaried versions of the plan.

Stellantis (FCA/Chrysler): the three-company basis chain

Stellantis N.V. (ticker: STLA), the parent company of the Chrysler, Dodge, Jeep, and Ram brands in the United States, has the most complex ownership history of any major domestic automaker. U.S. employees navigating NUA must understand three distinct corporate identities:⁴

1. Old Chrysler (pre-2009). Chrysler LLC filed for Chapter 11 bankruptcy on April 30, 2009. Similar to old GM, Chrysler's prior shareholders received no value. Old Chrysler was liquidated; the operating assets were sold to a new entity.
2. New Chrysler → Fiat Chrysler Automobiles (FCA) — 2009–2020. "New Chrysler" (initially Chrysler Group LLC) was formed in 2009 with Fiat S.p.A. taking ownership. In 2014, the combined entity relisted on the NYSE as Fiat Chrysler Automobiles (FCA, ticker: FCAU) at an initial price of approximately $9–$10/share. U.S. Chrysler employees who remained through the reorganization began accumulating employer stock contributions in FCA stock after the 2014 NYSE listing. FCA stock appreciated from its listing price to approximately $17–$19/share before the merger.
3. Stellantis N.V. (post-January 2021). PSA Group (Peugeot, Citroën, Opel) merged with FCA to form Stellantis, effective January 16, 2021. FCA shareholders received Stellantis shares at a 1:1 ratio — each FCA share was converted to one Stellantis share. The cost basis of FCA shares carried forward into Stellantis shares at the same per-share basis. Stellantis listed on the NYSE (ticker: STLA) at approximately $17/share in January 2021.

What this means for Stellantis NUA:

• Pre-2009 Chrysler contributions: extinguished in bankruptcy. No NUA opportunity tied to those shares.
• Post-2014 FCA contributions (2014–2020): cost basis between approximately $9 and $18/share (when FCA shares were received as employer match). These were converted 1:1 to Stellantis shares in January 2021.
• Post-2021 Stellantis contributions: new contributions at Stellantis market prices.
• Stellantis stock has been volatile since the 2021 merger, trading from a high of approximately $29/share in 2022 to lower values subsequently. The appreciation ratio for Stellantis employees depends heavily on current STLA market price versus their individual lot basis. Employees who received significant employer contributions at $9–$12 FCA prices before 2021 can have meaningful appreciation ratios in the 1.5:1 to 2.5:1 range, though this is more modest than what Ford or GE employees see in strong-NUA scenarios.

Stellantis employees should confirm with their HR and 401(k) plan administrator whether employer stock is available as an investment option in the U.S. plan and whether in-kind distribution is permitted. The plan's Summary Plan Description governs — not assumptions based on the parent company's European structure.

UAW pension income stacking in the distribution year

Both UAW hourly workers and salaried employees at the Big Three typically receive defined benefit pension income that begins at retirement. This is structurally similar to the pension-stacking challenge faced by manufacturing and aerospace employees — but the UAW context has specific dynamics worth understanding.

The bracket-floor problem

If your UAW pension generates $40,000–$60,000/year, that income fills the lower federal tax brackets before the NUA cost basis distribution begins. A Ford assembly worker with a $47,000/year UAW pension and a spouse receiving $22,000/year in Social Security already has $69,000 in gross income. Before any NUA distribution, their taxable income (after the $30,000 MFJ standard deduction) is $39,000 — solidly in the 12% bracket. When the NUA cost basis distribution adds $82,000 of ordinary income, the combined taxable income of $121,000 pushes part of the basis into the 22% bracket. The cost basis doesn't start fresh at 10%; it stacks on top of pension income already in the system.

The silver lining: pre-Social Security tranche selling window

For most UAW retirees who delay Social Security claiming to age 67 or 70, the years immediately after retirement (ages 62–67) represent a period when ordinary income consists only of the pension and any part-time work. During these years, the 0% long-term capital gains bracket threshold for MFJ filers ($98,900 of taxable income in 2026) creates substantial room to sell NUA stock at zero federal capital gains tax. A retiree with $47,000/year in pension income has taxable income of approximately $17,000 (after $30,000 standard deduction) — leaving $81,900 of 0% LTCG headroom per year.⁵

This means a Ford retiree with $300,000 of NUA appreciation can potentially sell the entire position over 4–5 years at 0% federal capital gains — paying only the federal ordinary income tax on the cost basis distribution in the retirement year and nothing on the appreciation thereafter. The UAW pension is what makes this work: it funds living expenses without requiring NUA stock sales in high-bracket years.

Special consideration: 30-and-out and early retirement incentive programs

UAW contracts have historically included "30-and-out" provisions allowing workers to retire with full pension benefits after 30 years of service regardless of age. A Ford worker who joined at 21 can qualify for full pension at 51 — well before age 59½. In this scenario, the NUA distribution (a "separation from service" qualifying event) at age 51 involves the 10% early withdrawal penalty on the cost basis portion, since the Rule of 55 exemption (IRC § 72(t)(2)(A)(v)) applies to employees separating at 55 or older, not 51. However, if the worker is still technically employed by Ford at the time of separation, they may qualify for the Rule of 55 if separation occurs in the year they turn 55 or later.

For workers separating before age 55, the penalty applies only to the cost basis (not the NUA appreciation), and very high appreciation ratios can make NUA worthwhile even with the penalty. Model the math specifically. See NUA Before Age 55: Does the 10% Penalty Change the Math?

State tax table for automotive employees

The automotive industry is heavily concentrated in Michigan, Ohio, Indiana, and Kentucky — states that tax capital gains as ordinary income. Unlike energy sector employees (many in Texas and Wyoming) or aerospace workers (many in Washington, Florida, and Texas), most auto workers do not benefit from a state-level LTCG advantage on top of the federal benefit. The federal NUA savings are still real and meaningful; state taxes simply don't add to them.

Michigan employees — the largest group in the auto NUA universe — should understand that the state's 4.05% flat income tax applies to capital gains at the same rate as ordinary income. This does not reduce the federal NUA benefit; it simply means the federal savings (typically $20,000–$80,000+ depending on position size and ratio) are not amplified by a state LTCG preference. Michigan residents who are considering relocating to Florida, Tennessee, or Texas before executing an NUA distribution should consult a tax advisor about residency establishment requirements — but the federal savings alone are substantial enough to warrant NUA analysis regardless of state of residence. See NUA and State Taxes for the full analysis.

Worked example: 32-year Ford assembly worker, Dearborn MI

Gary, age 63, is retiring in late 2026 after 32 years as an assembly technician at Ford's Dearborn Truck Plant. He files MFJ with his wife, who receives $22,000/year in Social Security (she claimed at 62).

Gary's Ford TCESP account at retirement

The 4.76:1 ratio reflects a blended basis across 32 years: early 1990s contributions with moderate basis, crisis-era 2009–2011 contributions at $1.50–$3/share (very low basis), and more recent contributions at higher prices.

Distribution year income (age 63, late 2026)

Federal tax on the cost basis distribution (distribution year)

Gary's pre-NUA gross income (pension + SS provisional) is approximately $69,000. After the $30,000 MFJ standard deduction, his taxable income before the NUA distribution is approximately $39,000 — in the 12% bracket. Adding the $82,000 cost basis distribution brings taxable income to $121,000:

• From $39,000 to $96,950 (top of 12% bracket): $57,950 taxed at 12% = $6,954
• From $96,950 to $121,000: $24,050 taxed at 22% = $5,291
• Total federal tax on $82,000 basis: approximately $12,245 (effective rate 14.9%)

Federal tax on NUA appreciation ($308,000): the pre-Social Security harvest window

Gary plans to delay Social Security to age 67, when he'll receive approximately $35,000/year. During ages 64–67, his only ordinary income is the $47,000 pension. After the $30,000 MFJ standard deduction, his ordinary taxable income is $17,000. The MFJ 0% long-term capital gains bracket extends to $98,900 of taxable income — leaving $81,900 of annual headroom for tax-free LTCG sales before any capital gains tax applies.⁵

At $81,900/year of headroom, Gary can sell the entire $308,000 of Ford NUA stock at the 0% federal LTCG rate in approximately 3.75 years (ages 64–67). He pays zero federal capital gains tax on the NUA appreciation.

Lifetime federal tax comparison

Michigan state note: Michigan taxes both ordinary income and capital gains at the same 4.05% flat rate. Gary pays $390,000 × 4.05% = $15,795 in Michigan state tax on his Ford stock under either scenario — the NUA election provides no state tax advantage in Michigan. The $73,555 federal savings are the entire NUA benefit. Verified against 2026 federal tax rates per IRS Rev. Proc. 2025-32; Michigan income tax rate per Michigan Department of Treasury 2026 rate schedule.

When NUA wins for automotive employees

• Crisis-era Ford contributions (2008–2012) at very low basis. Ford employees who accumulated the most shares during the period when stock was $1–$5 have the most compelling NUA ratios. A blended basis of $2–$4/share versus a current price of $11–$13 produces a 3:1 to 6:1 ratio — sufficient for a meaningful federal advantage at most bracket levels.
• UAW pension covers living expenses without forced stock sales. The tranche-selling strategy — harvesting NUA stock at 0% or 15% LTCG over 5–10 years — is only viable if other income covers basic needs. The UAW pension is exactly that income source. Auto workers with DB pensions are among the best-positioned employees in the country to execute this strategy.
• Delaying Social Security to maximize the 0% LTCG harvest window. The years between retirement and Social Security claiming are the window where ordinary income is lowest (pension only) and 0% LTCG headroom is widest. Gary's $73,555 federal savings above depend partly on selling Ford stock during those years at zero federal capital gains tax. The longer the pre-SS window, the larger the 0% harvest opportunity.
• Tennessee, Texas, or Florida residency. Automotive employees at GM's Spring Hill or Bowling Green plant (Tennessee), Ford's Austin facility (Texas), or transplant manufacturers in Florida capture the full federal LTCG spread without any state capital gains tax — the same position that most NUA guides describe as the strongest NUA profile.
• Estate step-up planning on large positions. For Ford employees with $500,000+ in employer stock and a long post-retirement horizon, holding NUA shares until death converts post-distribution appreciation to a step-up for heirs. Only the NUA layer itself (appreciation at distribution date) is income in respect of decedent (IRD). The $15M estate exemption (permanently set by OBBBA in 2025) means most auto retirees face no estate tax, making the estate step-up angle essentially free. See NUA and Estate Planning.⁶

When NUA doesn't help automotive employees

• Low appreciation ratio despite long tenure. Long service at Ford does not guarantee a favorable NUA ratio. Employees who accumulated most of their employer stock in the 2012–2020 period (when Ford stock fluctuated between $8 and $20 but never made dramatic sustained gains) may have a blended basis close to current market price. If the ratio is below 2:1, the NUA breakeven arithmetic typically favors the IRA rollover once Michigan state taxes are included in the full picture. Model the actual lot-level basis — don't assume a long career means a compelling NUA case.
• GM employees with only post-2010 contributions. If all of a GM employee's employer stock was accumulated after the November 2010 new GM IPO at $33/share, the appreciation ratio depends entirely on current GM stock price relative to their contribution prices. With 12–15 years of post-IPO accumulation and a range-bound stock, many GM employees have blended basis within 20–40% of current market price — a 1.2:1 to 1.5:1 ratio that typically doesn't justify NUA.
• Stellantis employees with post-2021 contributions at high prices. Stellantis stock peaked above $29 in late 2022 then declined sharply. Employees who received employer match contributions at $20–$29 and hold stock currently trading at lower values have an appreciation ratio near or below 1:1 — NUA is not beneficial, and the basis distribution would just accelerate taxation of the cost basis without a meaningful LTCG savings on the "appreciation."
• Plan document prohibits in-kind distribution. Some plan documents — particularly for collectively bargained plans — restrict distributions to cash only. If the Ford TCESP, GM Savings Plan, or Stellantis 401(k) does not allow in-kind stock distribution under your specific plan terms, NUA is not available. Confirm in writing before planning around it.
• 30-and-out retirement before age 55 with meaningful basis. Workers who separate at 52–54 under 30-and-out provisions face the 10% early withdrawal penalty on the cost basis distribution. At a 3:1–4:1 ratio with a large basis, the penalty can consume a substantial portion of the NUA savings. Model the penalty-adjusted breakeven, not the penalty-free version.
• Minnesota residency. If an auto worker has relocated to Minnesota (home of corporate offices for some auto suppliers), Minnesota taxes capital gains as ordinary income at rates up to 9.85%. At lower NUA ratios, combined federal LTCG + 9.85% MN state tax approaches combined federal ordinary income + 9.85% MN tax for IRA distributions, leaving little net advantage. See NUA and State Taxes.

Questions to ask your plan administrator

1. Does my plan currently hold employer stock as an investment option? (For GM employees: this is new GM stock, post-November 2010 only — confirm whether any pre-bankruptcy old GM shares are present, which would be unusual but worth verifying.)
2. Does the plan document allow in-kind distribution of actual stock shares — not liquidated proceeds — to a taxable brokerage account at separation or retirement?
3. What is my lot-level cost basis for each employer stock position? If I have multiple contribution dates, can you provide a lot-level report showing basis per lot?
4. For Stellantis employees: what was the basis treatment at the January 2021 FCA-to-Stellantis merger exchange? Was each FCA share's existing basis carried forward 1:1 to the new Stellantis shares?
5. Is a lump-sum distribution — covering the employer stock in-kind plus all other plan assets in a single tax year — available under my plan document, and what is the process to initiate it?
6. What is the December 31 deadline for completing the entire distribution in the tax year, and how far in advance do I need to initiate the request?

Sources

1. Ford Motor Company SEC filings (EDGAR) — Ford's annual reports document the Ford TCESP 401(k) plan structure, employer stock matching provisions, and Fidelity recordkeeper relationship.
2. Fidelity NUA Distribution Mechanics — step-by-step guide to the in-kind transfer process for plans administered through Fidelity Workplace Investing.
3. General Motors Company S-1 Registration Statement, 2010 (EDGAR) — "New GM" IPO prospectus documenting the November 2010 NYSE listing, $33/share IPO price, and reorganization history. Old GM's Chapter 11 filing was June 1, 2009.
4. Stellantis N.V. F-4 Registration Statement, 2020 (EDGAR) — FCA-PSA merger registration documenting the 1:1 FCA-to-Stellantis share exchange and cost basis continuity. FCA's original NYSE listing (ticker FCAU) was in January 2014.
5. IRS Rev. Proc. 2025-32 — 2026 inflation adjustments including LTCG brackets: 0% bracket for MFJ filers up to $98,900 of taxable income, 15% bracket up to $583,750, 20% above. Standard deduction MFJ $30,000.
6. IRS Publication 559 (Survivors, Executors, and Administrators) — income in respect of decedent (IRD) rules, including how the NUA layer of employer stock distributions is treated as IRD at the beneficiary's income rate, while post-distribution appreciation receives a step-up under IRC § 1014.

Tax figures verified as of 2026. Michigan income tax rate confirmed per Michigan Department of Treasury 2026 rate schedule (4.05% flat rate). Federal LTCG thresholds per IRS Rev. Proc. 2025-32. Stock price history is approximate and based on publicly available trading records; verify current prices before modeling NUA savings. Plan details (recordkeeper, investment options, in-kind distribution availability) are subject to change — confirm with your current Summary Plan Description.