Home / Stocks / GM temporarily cuts pay by 20% for 69,000 salaried workers amid coronavirus pandemic

GM temporarily cuts pay by 20% for 69,000 salaried workers amid coronavirus pandemic

General Motors on Thursday told its entire salaried workforce — about 69,000 employees — it will temporarily cut 20% of their salaries as the automaker attempts to save cash to weather the coronavirus crisis.

The reduced pay, which begins Wednesday, will be repaid in a lump sum with interest no later than next March 15, according to a list of actions announced by the company obtained by CNBC.

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.

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.

“GM’s business and its balance sheet was very strong before the COVID-19 outbreak and the steps we are taking now will help ensure that we can regain our momentum as quickly as possible after this crisis is over,” the company said in an emailed statement. 

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.

Shares of GM closed Thursday up 5% to $22.56. Shares were slightly down during after hours trading.  Ford closed down 2.6% but was up slightly in after-hours trading.

300-101   400-101   300-320   300-070   300-206   200-310   300-135   300-208   810-403   400-050   640-916   642-997   300-209   400-201   200-355   352-001   642-999   350-080   MB2-712   400-051   C2150-606   1Z0-434   1Z0-146   C2090-919   C9560-655   642-64   100-101   CQE   CSSLP   200-125   210-060   210-065   210-260   220-801   220-802   220-901   220-902   2V0-620   2V0-621   2V0-621D   300-075   300-115   AWS-SYSOPS   640-692   640-911   1Z0-144   1z0-434   1Z0-803   1Z0-804   000-089   000-105   70-246   70-270   70-346   70-347   70-410