General Motors (GM) - Get Report, which has closed factories because of the coronavirus pandemic, said salaried staff will have 20% of their pay deferred beginning next week through the fourth quarter or first quarter of 2021.
The automaker employs about 69,000 workers.
In an internal memo described to Bloomberg, GM's senior management team will take pay cuts of as much as 10% and defer 20% of their cash compensation. GM also will put 6,500 employees, many of them engineers, on leave with 75% of their pay until production resumes.
GM's board also will see its total compensation cut by 20%.
“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 shares were down 1.15% to $22.30 in premarket trading Friday.
General Motors also said in the memo it would be freezing work on new-vehicle programs, Bloomberg reported. However, models close to launch such as the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade will go on sale later this year as scheduled. The company also said its Cadillac electric SUV and Cruise Origin self-driving vehicle programs won't be delayed.
While GM is expected to save a significant amount of cash from the actions, it declined to disclose the savings, CNBC reported.
Hackett also said Ford will defer merit-based salary increases, partially defer executive salaries, suspend overtime for salaried workers and freeze hiring for noncritical skill positions, CNBC reported.