GM slashes salaries for thousands during coronavirus pandemic

General Motors is temporarily cutting pay for thousands of salaried workers to save cash during the coronavirus crisis. The Detroit-based automaker’s roughly 69,000 white-collar employees will defer 20 percent of their cash compensation starting Wednesday, the company said. Their health care benefits will not be affected. GM said the employees — who account for 42 …

General Motors is temporarily cutting pay for thousands of salaried workers to save cash during the coronavirus crisis.

The Detroit-based automaker’s roughly 69,000 white-collar employees will defer 20 percent of their cash compensation starting Wednesday, the company said. Their health care benefits will not be affected.

GM said the employees — who account for 42 percent of its global workforce — will get the money back with 6 percent interest by March 2021. Senior leaders will see their compensation reduced 30 percent while other executives will get a 25 percent reduction, the company said.

GM said it expects the moves will save a “significant” amount of cash but it did not disclose exactly how much.

“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,” GM spokesman David Barnas said in a statement.

Moreover, roughly 6,500 salaried employees in the US, most of whom cannot work remotely, will go on leave under a “Salaried Downtime Paid Absence” program, the company said. They’ll get 75 percent of their pay, according to GM.

GM’s move came as rival automaker Ford said Thursday that its top 300 executives would defer 20 to 50 percent of their salaries for at least five months starting May 1, with executive chairman Bill Ford giving up all of his salary during the period.

The company “may have to take tougher actions” if the coronavirus pandemic affects the world economy longer or more severely than anticipated, Ford president and CEO Jim Hackett told employees in a letter.

Fiat Chrysler Automobiles has also closed its US and Canada plants and its headquarters operations until April 14 to help prevent the coronavirus from spreading, the company said in a Thursday news release.