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GM Authority

GM Employees Hit With Salary Reduction During Coronavirus Pandemic

The ongoing coronavirus pandemic has hit businesses hard, and that includes General Motors. The automaker recently announced that it was suspending North American production, as well as drawing $16 billion in credit in order to “fortify its balance sheet” in the face of the chaos created by the spread of the virus. Now, a new report indicates that GM employees are next in line to face the economic consequences of the virus as the automaker mandates sweeping salary reductions.

According to a new post from Jalopnik, GM employees were recently informed of a wage reduction plan that includes a “20-percent pay deferment” for salaried workers operating at home, beginning April 1st. These GM employees will then receive their cut wages as a single lump sum, which will be repaid between Q4 of 2020 and Q1 of 2021, with interest.

A few weeks ago, GM issued a notice to employees which stipulated that all workers should work remote, if possible.

The new report also says that the roughly 6,500 U.S. GM employees who can’t work from home, the majority of which are in manufacturing and engineering roles, will incur a 25-percent salary reduction as part of what is referred to as the “Salaried Downtime Paid Absence” policy. The reduced salary is intended as an alternative to unemployment benefits.

Furthermore, the notice indicates that GM executives in the Senior Leadership team will see a 25- to 30-percent pay cut. The Board of Directors will also get see a 20-percent pay cut.

Healthcare benefits will not be impacted by these compensation reductions.

Meanwhile, GM production operations are drawing down across North America, including in the U.S., Canada, and Mexico. GM recently issued a schedule for plant closures in Mexico, with a total shut down expected by March 30th. Originally, a tentative resumption of GM production was expected by the end of March, but now, it’s believed that operations will not resume until well into April at the earliest.

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Jonathan is an automotive journalist based out of Southern California. He loves anything and everything on four wheels.

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Comments

  1. dividend suspension is next.

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    1. That should have come first.

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  2. So why aren’t the engineers pushing for unionization like they have at Boeing?

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    1. This type of situation where something beyond GM’s control is affecting its business does not mandate a unionization of its engineers. What is needed most right now is understanding, patience, and sacrifice across the board so we can all get through this together.

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  3. Wouldn’t it make sense for the GM corporate employees to incur the highest percentage of reduced salary. The GM employees on the front line who produce the vehicles are hit the hardest as they all have families to feed. Shouldn’t GM be trying to protect the front line employees first? Mary Barra should see the biggest salary reduction!!

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    1. Probably because the corporate people can actually work from home.

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  4. 🤣🤣🤣🤣🤣🤣🤣Probably not the CEO AND HER COHORTS!

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  5. Ford did a salary reduction, too (see “Ford Authority”). Jim Hackett and the top 500 executives are getting a 50% reduction. Bill Ford will not get paid at all . These cuts begin now and end in August.

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    1. You think Mary Barra or whatever her name is will do the same thing.🤷‍♂️🤷‍♂️🤷‍♂️🤷‍♂️

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    2. that reduction is a deferment. they’ll get their money but just later. not much of a sacrifice.

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  6. figures the line workers get hit the most ,it should be the other way around Mary !!!!

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  7. I think all the top execs should take a pay cut as well. They are living in the same times as their workers. They aren’t excluded living with Coronavirus they should not be excluded from the pay cut!!!!!

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  8. I think all the top execs should take a pay cut as well. They are living in the same times as their workers. They aren’t excluded living with Coronavirus they should not be excluded from the pay cut!!!!! I know I already said this but submitting it it continues not to go on.

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    1. I’m glad I’m not the only one who doesn’t see my comment appear after I posted it. Doesn’t seem to make a difference if I’m logged in or not! I feel better now.

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      1. Robert Trotta after posting look at bottom furthest from the top for your recent comment. I see it it do you?

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        1. I see my messages here Rich but there are other times when I post and they do not appear no matter where I look.

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  9. Barra’s pay and bonus should be cut to Zero

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