General Motors on Thursday told its entire salaried workforce, which is about 69,000 employees and it will temporarily cut 20% of their salaries as the automaker attempts to save cash to weather the coronavirus crisis.
About 6,500 U.S. employees who cannot work from home will go on paid leave, which the company is calling a “salaried downtime paid absence.” The workers will receive 75% of their pay, keep seniority and retain health benefits, CNBC reported.
In addition to the 20% salary deferral for white-collar workers, executives are also taking cuts of 5% or 10% to their cash compensation, excluding bonuses, stock options or other incentives. The GM board will take a 20% reduction in total compensation.
According to CNBC, GM declined to disclose the expected cash savings from the actions.Earlier Thursday, Ford Motor announced that its top 300 executives will defer 20% to 50% of their salaries for at least five months as it attempts to manage the pandemic.
The two Detroit automakers as well as Fiat Chrysler last week shuttered their domestic manufacturing operations following pressure by the United Auto Workers union to reduce the spread of the virus to its members.