Fiat Chrysler Automobiles (FCA) announced to its salaried white-collar employees yesterday, that the company will defer up to 20% of their pay for the next three months, as the company attempts to save money during the current COVID-19 (or Coronavirus) crisis. The cut doesn’t just affect the salaried white-collar workers, as the company has also announced the CEO Mike Manley, and the company’s Group Executive Council (GEC) will also take cuts during that time as well.
Addressed to the company’s employees on Monday, Manley wrote an e-mail in detail about the reasons behind the decision. “Protecting the financial health of the company is everyone’s responsibility and naturally starts with myself and the leadership of FCA,” Manley said, stating that the cuts are “to avoid the layoff of any permanent employees.” This comes only days after FCA announced it was letting 2,000 of its around 3,000 of its temporary workers go, amid the crisis.
Manley himself will take a 50% cut in his salary, while members of the GEC the company’s governing body will have 30% of their salary cut for the time being. “Further, our Chairman John Elkann and our Board of Directors have unanimously agreed to forgo their remaining 2020 compensation,” Manley announced in the letter. FCA has also suspended its matching contributions for the Employees’ Savings Plan (SESP), also known as the 401(k) for the next three months.
FCA will begin to implement the changes to its white-collar staff starting on April 1st. The changes will last until July 1st.
In recent days, both General Motors (GM) and Ford Motor Company have taken similar tactics to ensure their companies survival, with current production in North America coming to a halt and many of the company’s dealers closed throughout the country. GM announced last week, that it was also deferring payments of 20% for its white-collar workforce. Ford has also announced that its top-300 executives would cut anywhere from 20% to 50% of their salaries for the next five months, which are expected to start May 1st.