General Motors (NYSE:GM) is halting work on some of its future-product programs and temporarily reducing pay for salaried workers to conserve cash as it prepares to weather an extended period of factory shutdowns and sharply lower sales.
In an email to GM employees on Thursday, CEO Mary Barra said that all of GM's salaried employees, worldwide, with a few exceptions, will have 20% of their compensation deferred, beginning on April 1. Executives will defer 25% of pay, and members of the company's senior leadership team will have 30% deferred, she said.
Employees' health-care benefits will not be affected by the salary deferrals.
The exceptions are for the salaried GM employees who can't realistically work from home, mostly engineers and manufacturing experts. Those people, about 6,500 in the U.S., will receive 75% of their pay, plus benefits, in lieu of being laid off.
Barra told employees that for several years now, GM has been making "difficult decisions to strengthen our business and make it more resilient." The current situation will put those decisions to the test, she said.
The details of Barra's email to GM employees were first reported by Jalopnik.
In addition to the pay deferrals, GM will slow or suspend development programs for many of its upcoming vehicles, to reduce its cash consumption while its factories are closed.The company will continue developing and preparing to launch its redesigned full-size SUVs, its upcoming electric vehicles and battery programs, and the Cruise Origin self-driving taxi.
GM plans to pay back the deferred amounts to affected employees in a lump sum by March 15 of next year.