FCA to cut white-collar workers’ salaries by 20% in the upcoming 3 months
- FCA's global salaried workforce to see a 20% cut in salary to avoid layoffs.
- CEO Mike Manley agrees to a 50% cut in his salary for the next three months.
- Group Executive Council members to receive a 30% lower salary in the same time period.
The
Coronavirus pandemic has pushed global businesses into cutting costs to support
their financial stature during the economically challenging time. In recent
news, Fiat Chrysler Automobiles (BIT:FCA) said that it plans on cutting employees’
salaries by 20% in the next 3 months. The company said that the cut would be
applicable to its white-collar employees only.
FCA’s
chief executive officer, Mike Manley, highlighted in a letter on Monday that his
own salary will also be cut by 50% for the next 3 months. The
Italian-American car manufacturer also announced a 30% cut in the salaries
of its executives who make up the company’s Group Executive Council (GEC). GEC
is Fiat’s highest decision-making authority.
FCA
Says Salary Cut Is To Avoid Layoffs
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According
to the CEO:
“Protecting
the financial health of the company is everyone’s responsibility and naturally
starts with myself and the leadership of FCA. The announced reduction in
salaries is to avoid the layoff of any permanent employees.”
The
automaker’s chairman, John Elkann, along with the rest of the board members were
also reported in agreement to waive their remaining compensation for 2020. The
announced salary cut, as per the company, will be applicable from Wednesday.
FCA’s
announcement on Monday also highlighted the company’s plans of reimbursing its
white-collar workers for the upcoming salary cuts by 15th March
2021. For now, the reduction in salaries will apply to the majority of the car
manufacturer’s global workforce (salaried).
Fiat
Chrysler Automobiles, however, is not the only one to resort to salary cuts
to maintain its financial stature during the fast-spreading Coronavirus that
has brought global operations to a near halt. Its staunch rivals, Ford Motor,
and General Motors, had also announced similar strategies last week.
GM
And Ford Also Resorted To Similar Strategies
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GM
said that its white-collar workers will see a 20% cut on their regular salaries
while Ford announced a 20% to 50% reduction in the salaries of its top 300
executives for the next five months.
At
the time of writing, FCA is exchanging hands at £5.64 per share in the stock
market that translates to an over 50% decline in 2020 so far. The automaker
also remained challenged in 2019 with an annual gain of close to 0.0% in the
stock market.
Fiat
Chrysler Automobiles currently has a market cap of £8.72 billion with a price
to earnings ratio of 3.70.
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