US automakers cut salaries and cut spending

US automakers cut salaries and cut spending

March 28, 2020 0 By autotimesnews

In order to survive the crisis in the industry caused by coronavirus, car manufacturers have to take an extreme step.

Bill Ford’s chairman of the board of directors, Bill Ford, has no plans to defer salary payments for at least the next 5 months. However, a number of top managers of the company can remain with only half of the payments due to them. Thus, the automaker plans to reduce financial losses in the context of the coronavirus pandemic.

According to representatives of the American brand, the sums accumulated from the delay will be paid after the company repays at least $ 7 billion of the loan, the total amount of which is $ 15.4 billion. Ford began using credit in mid-March to reduce the negative impact of the COVID-19 pandemic.

The company also expects to do without layoffs, but will carefully monitor the situation in a rapidly falling market. So far, the company has suspended salary increases, overtime, and hiring employees for secondary jobs.

Following the rival, General Motors announced on March 27 that to save on pandemics, it would temporarily cut permanent employees around the world by 20% and freeze work on some projects. Salaries will be reduced from April 1, but the company promises to further compensate for the loss of personnel income. Also, a number of employees who cannot be transferred to remote work will be temporarily laid off with the appointment of a 75 percent salary.

GM will suspend work on some projects and reduce marketing budgets. Work on some new models will also be delayed, but cars close to launch, such as the large Chevrolet Tahoe, GMC Yukon and Cadillac Escalade SUVs, will be launched on the market by the end of 2020. The company also did not stop the development of the Cadillac electric crossover and the autonomous Cruise Origin, a company spokesman said in an interview with Bloomberg.