AutoBeta(AutoBeta.net)03/27 Report--

Due to the spread of the COVID-19 epidemic, American car companies have temporarily closed their factories and entered a state of suspension, and they are under pressure from the continuing uncertainty of the epidemic, so in order to ensure sufficient funds to survive the virus crisis, both Ford and GM have announced "temporary wage cuts" and delayed the payment of part of the salaries of employees and executives.

According to foreign media reports, General Motors has announced an indefinite suspension of production activities at its North American plants and has decided to delay the payment of all its salaried employees (about 69000 people) and will temporarily cut their wages by 20%. To save cash in response to novel coronavirus's crisis.

GM also said that the pay cut, which begins on Wednesday, will be refunded in a lump sum, including interest, by March 15, 2021.

It means that some of the wages owed by GM employees will be deferred in the form of interest compensation.

In addition, GM board executives will cut their total pay by 20%, while white-collar employees in the office will also receive a brief 20% pay cut, and GM will offer them cash compensation in the range of 5% to 10%. But does not include bonuses, stock options or other incentives.

Another American car giant has taken the same step. Ford has announced that 20% of the salaries of the company's top 300 executives will be postponed to varying degrees, in order to save money during the epidemic.

Of these, Bill Ford, Ford's executive chairman, will postpone 100 per cent of his salary, while CEO Jim Hackett, Jim Farley and CFO Tim Stone of Ford will postpone 50 per cent of their salaries, effective May 1.

Not long ago, Ford announced the use of a $15.4 billion credit line and saved $2.4 billion in financial costs by suspending dividends and other financial measures to ensure the company's stable cash flow and cope with outages and other outages. The salaries delayed this time will not be paid until the company has repaid the $7 billion loan line.

Ford delivered a disappointing earnings report this past 2019, mainly affected by new labor agreements, setbacks in sales of a number of products and poor performance in its core markets. In 2019, Ford's operating income was $155.9 billion, down 3 per cent from a year earlier; full-year profit before interest and tax was $6.4 billion, down from $7 billion in 2018; and net profit was only $47 million, down from $3.7 billion in 2018, a decline of 98.7 per cent.

As a result, the shutdown caused by the epidemic will further aggravate Ford's financial worries. Ford CEO Hankate also said that Ford would try not to lay off staff during the outbreak, but that if the outbreak developed and lasted longer than expected, it would also have to "make difficult decisions."

As of 6: 00 Beijing time on the 27th, the cumulative number of confirmed cases of COVID-19 in the United States reached 82404, surpassing China and Italy, according to the overseas Network on March 27th. In the future, there is still a lot of uncertainty about when American car companies will restart production activities in their factories.

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