Coronavirus prompts GM to temporarily cut pay for 69,000 salaried workers

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General Motors is temporarily cutting 20 percent of salaries for 69,000 of its workers, or 42 percent of its global staff, the automaker confirmed Friday.

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The decision comes as companies both big and small are experiencing less demand and attempting to conserve cash amid the COVID-19 pandemic.

GM's pay reductions will also help ensure the company has "the expertise and manpower to regain our momentum quickly after the crisis," GM spokesman David Barnas told FOX Business.

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The portions of their salaries that workers aren't receiving now will be returned to them in a lump sum, with interest, no later than May 15, 2021. The reduction will not impact health care benefits, the automaker said.

About 6,500 GM employees who cannot work from home will participate in "salaried downtime paid absence," and receive 75 percent of their salaries in lieu of unemployment benefits.

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"GM’s business and its balance sheet was very strong before the COVID-19 outbreak," GM said in a statement, "and the steps we are taking now will help ensure that we can regain our momentum as quickly as possible after this crisis is over."

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Pay for GM's board will be reduced 20 percent, while executive compensation will be cut 25 percent and senior leadership salaries will be lowered 30 percent.

Robots weld a Chevrolet Sonic at the General Motors Orion Assembly plant in Michigan. (AP Photo/Paul Sancya)

The automaker announced last week that it would team with Ventec Life Systems and StopTheSpread.org, a coordinated private-sector response to COVID-19, to help Ventec increase output of respiratory-care products as hospitals across the U.S. face a ventilator shortage.

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Coronavirus prompts these CEOs to give up their salaries

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A growing number of CEOs are foregoing their salaries as U.S. companies contend with financial difficulties during the coronavirus outbreak.

Coronavirus has had devastating financial consequences for hotels, restaurants, airlines and various other industries forced to alter operations to slow the spread of the virus. Social distancing practices and bans on mass gatherings have forced widespread temporary store closures.

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Without a steady source of revenue, many businesses have conducted layoffs or garnished employee wages to conserve resources. The Trump administration has worked with congressional leaders on a bailout package designed to provide much-needed relief to embattled industries and small businesses.

In some cases, top business leaders have forfeited their base salaries to ease the financial burden.

FOX Business takes a look at companies whose CEOs have given up their pay during the coronavirus outbreak below.

AMC

Adam Aron, CEO, AMC Entertainment Holdings, Inc., speaks during TheWrap’s 7th Annual TheGrill at Montage Beverly Hills on Sept. 27, 2016, in Beverly Hills, California. (Matt Winkelmeyer/Getty Images)

The movie theater chain furloughed all 600 of its corporate employees, including CEO Adam Aron, after coronavirus forced the closure of theaters nationwide.

"At this time, AMC is not terminating any of its corporate employees, however, we were forced under the circumstances to implement a furlough plan, which is absolutely necessary to preserve cash and to ensure that AMC can reopen our doors once this health crisis has dissipated," the company said in a statement.

Boeing

Boeing CEO Dave Calhoun and chairman Larry Kellner will forego their pay for the rest of 2020. In addition, the embattled company said it would suspend dividends and extend its moratorium on share repurchases.

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In the months prior to the coronavirus outbreak, Boeing shares saw significant declines as the company navigated the grounding of its 737 Max aircraft. The plane is set to return to production later this year.

Delta Air Lines

In a memo to staffers, Delta CEO Ed Bastian said he and the airline's board of directors will give up 100 percent of their salaries over the next six months.

Dick’s Sporting Goods

The sports retailer said in a March 19 SEC filing that CEO Edward Stack and president Lauren Hobart would forego their salaries starting on March 29.

General Electric

David Joyce, vice chairman of GE and president and CEO of GE Aviation, will forego half of his salary. The decision takes effect on April 1.

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Lyft

Lyft cofounders John Zimmer and Logan Green said they would donate their salaries through June toward the ride-share company’s efforts to support its drivers amid a downtick in travel.

Marriott

Marriott International CEO Arne Sorenson said in a video message he would give up his salary for the rest of 2020.

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United Airlines

United CEO Oscar Munoz and President Scott Kirby are foregoing their base salaries through June as the airline contends with a reduced operating schedule necessitated by the outbreak.

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Coronavirus pandemic prompts US, Mexico to restrict non-essential border travel, Trump administration says

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The U.S. and Mexico will restrict all non-essential travel across their border for at least 30 days, the Trump administration announced Friday.

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"All international travel from U.S. citizens should be avoided," Secretary of State Mike Pompeo said on Friday during a White House press briefing. "U.S. citizens, who reside in the United States, should arrange for immediate return to the United States, unless they're prepared to remain abroad for an extended period of time."

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Acting Homeland Security Secretary Chad Wolf said that essential travel includes medical purposes, educational institutions reasons, emergency response and public health purposes, as well as cross-border trade.

"Tonight, at midnight, we will execute the CDC order by immediately returning individuals arriving without documentation to Canada, Mexico, as well as a number of other countries, without delay," he said.

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The announcement follows a new travel alert issued on Thursday by the State Department urging Americans to not go abroad under any circumstances and to return home if they are already overseas. The Level 4 travel advisory for all international travels is the most severe warning issued by the department.

There are 164 confirmed coronavirus cases currently in Mexico and 14,651 in the U.S, according to a database published by Johns Hopkins University.

Beginning Friday at midnight, the border between the U.S. and Canada will also shut to non-essential travel for 30 days.

"We will be, by mutual consent, temporarily closing our Northern Border with Canada to non-essential traffic. Trade will not be affected," Trump tweeted Wednesday.

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Coronavirus prompts Starbucks to mull limiting orders to drive-thru, mobile only

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Starbucks will consider enacting precautionary store policies in some areas to protect employees and customers from the worsening coronavirus outbreak, CEO Kevin Johnson said on Thursday.

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The coffeehouse chain could move to limit seating for social distancing purposes or restrict purchases to mobile orders for pickup and delivery or drive-thru as necessary. While U.S. and Canadian stores maintain normal operations at present, Johnson said that decisions on store policies would be made on a “community-by-community and store-by-store” basis as the outbreak unfolds.

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“As a last resort, we will close a store if we feel it is in the best interest of our customers and partners, or if we are directed to do so by government authorities,” Johnson said in a letter to customers. “In any such situation, we expect store disruption to be temporary.”

At least one Starbucks employee in Seattle has tested positive for coronavirus to date. The diagnosis prompted Starbucks to temporarily shutter the impacted store for a deep cleaning.

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U.S. authorities have confirmed more than 1,300 individual cases of coronavirus to date and at least 38 deaths, according to a Johns Hopkins University database. Seattle, which houses Starbucks’ global headquarters, has dealt with a particularly severe outbreak.

In a separate announcement, Starbucks detailed benefits for employees affected by the coronavirus outbreak. Aside from paid sick leave and personal time off, Starbucks said it would offer “catastrophe pay” to employees diagnosed or directly impacted by coronavirus.

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SBUX STARBUCKS CORPORATION 63.80 -4.50 -6.58%

The catastrophe pay benefit lasts for 14 days, though Starbucks employees unable to return to work will be eligible for replacement pay for up to 26 weeks. The chain is also offering mental health benefits.

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“You have our full support when it comes to partner care, including access to catastrophe pay, benefits that support your physical and mental health, as well as a network of partners who are all here to help,” said Rossann Williams, Starbucks executive vice president and president of company-operated stores in the U.S. and Canada.

Johnson said Starbucks used its experience dealing with coronavirus’s impact on its stores in China to inform decisions for U.S. operations. While more than 90 percent of Starbucks’ China stores are back in operation, the company warned earlier this month that expected second-quarter revenue in the region would drop by as much as $430 million due to the outbreak.

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Coronavirus prompts FDA to detail screening of Chinese-made products

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The U.S. Food and Drug Administration is taking alternative steps to determine if Chinese-made products meet federal safety standards due to complications related to the coronavirus outbreak, department officials said Monday.

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The virus, dubbed COVID-19, originated in China and has spread rapidly to other countries in recent weeks. China disclosed an additional 71 deaths related to coronavirus on its mainland on Monday, bringing the death toll to more than 2,600 people in the country alone.

Travel restrictions imposed by the U.S. government have hindered the FDA’s ability to conduct routine inspections of goods imported from China. In lieu of on-site inspections, FDA officials are requesting relevant records from firms to monitor imports and help to prioritize inspection efforts once the travel advisory is lifted.

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“While we are not able to conduct inspections in China right now, this is not hindering our efforts to monitor medical products and food safety,” the FDA said in a statement. “We have additional tools we are utilizing to monitor the safety of products from China, and in the meantime, we continue monitoring the global drug supply chain by  prioritizing risk-based inspections in other parts of the world.”

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To date, U.S. officials have disclosed 53 coronavirus cases. The FDA said it has “no evidence” to suggest that products imported from China have transmitted coronavirus.

More than 60 percent of FDA-regulated products manufactured in China are medical devices, while an additional 20 percent of products are forms of houseware, such as food packaging, the FDA said.

Aside from the records requests, the FDA said it is collaborating with U.S. Customs and Border Protection to identify products that pose a risk for violating safety standards through unintentional or deliberate means.

“Fortunately, currently, we are not seeing the impacts of this outbreak resulting in an increased public health risk for American consumers from imported products,” the FDA added.

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Chinese businesses have experienced major interruptions in their operations due to the coronavirus outbreak. In addition, several U.S. firms active in the Chinese market, including Apple, Nike and Starbucks, have closed stores in the region to mitigate health risks.

The outbreak has stoked fears of a medication shortage due to an interruption to shipments of drug components made in China, Axios reported earlier this week.

Mounting fears of a global pandemic weighed on U.S. stock indices on Monday, shaving more than 1,000 points off the Dow Jones Industrial Average.

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