GM employees will have 20% of their pay deferred as the coronavirus pandemic hits the auto industry hard
- General Motors' 69,000 salaried employees worldwide will defer 20% of compensation, starting April 1, as the automaker contends with the COVID-19 coronavirus pandemic.
- Executives and senior leaders are taking a 25% and 30% reduction, respectively, and board members are taking a 20% reduction.
- Last week, GM suspended North American manufacturing and has more recently indicated that a March 30 restart is unlikely.
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On Friday, General Motors confirmed that its 69,000 salaries employees worldwide would have 20% of their cash compensation deferred, starting April 1.
In a statement, the automaker said, "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 deferred compensation would be paid in a lump sum, GM said, no later than March 15, 2021.
In addition, GM's executives are taking a 25% reduction, while top leadership is taking a 30% reduction an board member will see a 20% decrease.
The automaker said that benefits wouldn't be affected.
GM suspended North American production last week and has more recently said that it would not resume car-making at the end of March, as originally planned. The company also announced that it would drawdown $16 billion in credit facilities to add to the approximately $16 billion it currently has on its balance sheet.
Beyond the salary deferrals, GM said that "about 6,500 salaried employees in the US" would join a "Salaried Downtime Paid Absence" program.
"These salaried employees will receive 75 percent of their pay while on SDPA," GM said. "This reduced salary is intended to be in lieu of unemployment compensation benefits."
GM said that these employees are in manufacturing and engineering roles and can't work remotely.
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