About 69,000 employees of General Motors worldwide will have their salary cut by 20% in an effort by the automaker to save cash as it faces the challenges brought upon by the global COVID-19 pandemic.
Starting Wednesday, 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.” Those affected will be receiving 75% of their salary, keep seniority, and retain health benefits. For white-collar workers who are likewise affected by the measure, executives are also taking cuts of 5% or 10% to their cash compensation, excluding bonuses, stock options, or other incentives, on top of the 20% salary deferral. The GM board will take a 20% reduction in total compensation.
A list of actions sent by the company to its employees, the affected workers will have their salaries repaid in a lump sum with interest no later than next March 15.
“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.
Meanwhile, GM also announces that they will start production of critical care ventilators after President Donald Trump slammed the company and CEO Mary Barry, accusing them of wanting “top dollar” for the ventilators. General Motors and Washington-based Ventec Life Systems said that efforts to begin production of critical-care ventilators are “already underway.”
GM also said that they would even begin manufacturing FDA-cleared Level 1 surgical masks at its Warren, Michigan manufacturing facility. The statement from the company said that production would start next week and within two weeks ramp up to 50,000 facemasks per day, with the potential to increase to 100,000 per day.
“We are proud to stand with other American companies and our skilled employees to meet the needs of this global pandemic,” said Barra. “This partnership has rallied the GM enterprise and our global supply base to support Ventec, and the teams are working together with incredible passion and commitment. I am proud of this partnership as we work together to address urgent and life-saving needs.”