General Motors on Thursday told its entire salaried workforce — about 69,000 employees — it will temporarily cut 20% of their salaries as the automaker attempts to save cash to weather the coronavirus crisis.
The reduced pay, which begins Wednesday, will be repaid in a lump sum with interest no later than next March 15, according to a list of actions announced by the company obtained by CNBC.
About 6,500 U.S. employees who cannot work from home will go on paid leave, which the company is calling a "salaried downtime paid absence." The workers will receive 75% of their pay, keep seniority and retain health benefits.
In addition to the 20% salary deferral for white-collar workers, executives are also taking cuts of 5% or 10% to their cash compensation, excluding bonuses, stock options or other incentives. The GM board will take a 20% reduction in total compensation.
"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 declined to disclose the expected cash savings from the actions.
Earlier Thursday, Ford Motor announced that its top 300 executives will defer 20% to 50% of their salaries for at least five months as it attempts to manage the pandemic.
The two Detroit automakers as well as Fiat Chrysler last week shuttered their domestic manufacturing operations following pressure by the United Auto Workers union to reduce the spread of the virus to its members.
Shares of GM closed Thursday up 5% to $22.56. Shares were slightly down during after hours trading. Ford closed down 2.6% but was up slightly in after-hours trading.