Coronavirus prompts GM to temporarily cut pay for 69,000 salaried workers
'Steps we are taking now will help ensure that we can regain our momentum as quickly as possible'
General Motors is temporarily cutting 20 percent of salaries for 69,000 of its workers, or 42 percent of its global staff, the automaker confirmed Friday.
The decision comes as companies both big and small are experiencing less demand and attempting to conserve cash amid the COVID-19 pandemic.
GM's pay reductions will also help ensure the company has "the expertise and manpower to regain our momentum quickly after the crisis," GM spokesman David Barnas told FOX Business.
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The portions of their salaries that workers aren't receiving now will be returned to them in a lump sum, with interest, no later than May 15, 2021. The reduction will not impact health care benefits, the automaker said.
About 6,500 GM employees who cannot work from home will participate in "salaried downtime paid absence," and receive 75 percent of their salaries in lieu of unemployment benefits.
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"GM’s business and its balance sheet was very strong before the COVID-19 outbreak," GM said in a statement, "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."
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Pay for GM's board will be reduced 20 percent, while executive compensation will be cut 25 percent and senior leadership salaries will be lowered 30 percent.
Robots weld a Chevrolet Sonic at the General Motors Orion Assembly plant in Michigan. (AP Photo/Paul Sancya)
The automaker announced last week that it would team with Ventec Life Systems and StopTheSpread.org, a coordinated private-sector response to COVID-19, to help Ventec increase output of respiratory-care products as hospitals across the U.S. face a ventilator shortage.