Photo: Chevrolet
As you’re well aware, COVID-19 has hit the automotive industry in every aspect. Less production output, less demand for new vehicles, and working from home are only a few of the effects of the coronavirus pandemic, but there’s another aspect that has to be taken into account.
General Motors, for example, told 69,000 salaried employees that their salaries will be cut by 20 percent. CNBC has found out that the reduced pay will be returned “in a lump sum with interest no later than March 15th, 2021.” Of those 69,000, the U.S. accounts for 6,500 workers.
Receiving 75 percent of their pay is one thing, but General Motors sweetens things up by keeping the workers’ seniority and retaining health benefits. Executives will take 5- to 10-percent cuts while the board of directors will be hit by a 20-percent reduction in total compensation.
General Motors didn’t tell CNBC how much it expects to save from this exercise in damage control, but the Ford Motor Company has taken even more drastic measures. To the point, the top 300 executives of the Blue Oval will defer 20 to 50 percent of their pay for five months.
U.S. auto sales are expected to drop more than 15 percent in 2020 over COVID-19, and globally, the forecast boils down to a 12-percent decline to 78.8 million vehicles. Come April 2020, the year-over-year results for March 2020 will paint a clearer picture of the downswing.
Imagine this for a moment. If auto sales in the United States of America will fall by a quarter over 2019, the repercussions will affect more than just the automakers’ employees and the suppliers. Dealerships need to gear up for less business, automakers will slow down the development of next-generation models and technologies, and looking at the bigger picture, fewer sales and less money to spend translates to a contracting economy.
The reason the C8 Corvette is featured in the main photo and the gallery of this story is that Chevrolet has stopped taking orders for the 2020 model year in the third week of March. The Bowling Green factory currently sits idly, and the suspension will last until March 30th at the least. The order banks for the 2021 model year Chevrolet Corvette will open in May.
Receiving 75 percent of their pay is one thing, but General Motors sweetens things up by keeping the workers’ seniority and retaining health benefits. Executives will take 5- to 10-percent cuts while the board of directors will be hit by a 20-percent reduction in total compensation.
General Motors didn’t tell CNBC how much it expects to save from this exercise in damage control, but the Ford Motor Company has taken even more drastic measures. To the point, the top 300 executives of the Blue Oval will defer 20 to 50 percent of their pay for five months.
U.S. auto sales are expected to drop more than 15 percent in 2020 over COVID-19, and globally, the forecast boils down to a 12-percent decline to 78.8 million vehicles. Come April 2020, the year-over-year results for March 2020 will paint a clearer picture of the downswing.
Imagine this for a moment. If auto sales in the United States of America will fall by a quarter over 2019, the repercussions will affect more than just the automakers’ employees and the suppliers. Dealerships need to gear up for less business, automakers will slow down the development of next-generation models and technologies, and looking at the bigger picture, fewer sales and less money to spend translates to a contracting economy.
The reason the C8 Corvette is featured in the main photo and the gallery of this story is that Chevrolet has stopped taking orders for the 2020 model year in the third week of March. The Bowling Green factory currently sits idly, and the suspension will last until March 30th at the least. The order banks for the 2021 model year Chevrolet Corvette will open in May.
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