Fiat Chrysler Automobiles NV said it will temporarily cut employee salaries by 20 percent for up to three months to preserve cash and avoid job cuts amid the coronavirus or Covid-19 crisis.
Multiple reports cited a letter by Chief Executive Mike Manley to employees that his salary would be cut by 50 percent for the same period. Further, Chairman John Elkann and the other Board members will give up their remaining compensation for the year 2020.
The wages of the company’s 20-member Group Executive Council other executives will be cut by 30 percent.
The company expects to start the compensation reduction by April 1. Fiat Chrysler said it would repay the reduced funds to employees no later than March 15, 2021.
Manley reportedly wrote, “As the pandemic has spread, we have prioritized creating a safe and healthy workplace but also worked to safeguard the jobs of permanent FCA employees. As we go through this period, we continue to plan for the time we emerge from this crisis and in order to do so, we are taking numerous steps to protect our company during this time.”
Last week, rival General Motors Co. also said it would cut pay for its executives as part of efforts to conserve cash amid the pandemic. Salaried workforce will have 20 percent of pay deferred starting April 1. GM’s senior management team will take pay cuts of as much as 10 percent and defer 20 percent of their cash compensation. The deferred money would be repaid through the fourth quarter of this year or first quarter of 2021.
Fiat Chrysler, as well as General Motors and Ford have already closed their North American plants to stop the spread of the virus.
The automakers are also taking various efforts to help in the fight against the coronavirus crisis. Fiat Chrysler said it would manufacture and donate more than 1 million protective face masks per month.
Further, Ford Motor Co. has joined with GE Healthcare to produce 50,000 ventilators in Michigan within the next 100 days. General Motors has partnered with ventilator maker Ventec Life Systems to produce ventilators.
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