General Motors (NYSE: GM) announced it had an USD806 Million loss and depleted billions of its cash spend in the second quarter. However, the company simultaneously decided to restore its 69,000 workers full income, after previously having to cut it amid the coronavirus pandemic.
The multinational American corporation published the results Wednesday, which reflected a 34% drop in U.S auto sales due to “the COVID-19 pandemic and tight dealer inventories caused by the production shutdown in the first and second quarters.”
Compared to the previous year’s USD2.42 Billion profit during the same time period, the loss is a tremendous shock. Revenue for the three months ending Jun 30 amounted to USD16.78 Billion compared to last year’s USD36.1 Billion. Nevertheless, the economic downturn is not as severe as Wall Street had anticipated. Overall the company lost USD.50 a share while experts predicted a loss of USD1.77 per share.
Furthermore, as many employees receive their full pay, CEO Mary Barra along with other company leaders will continue to take pay deferrals. The executives cut signifies a 5%-10% reduction in salary.
“We are restoring pay earlier than planned because of the hard work that has been done around the world in protecting our cash position during very challenging times,” wrote Kim Brycz, GM’s chief of global human resources, in an email to workers. “We will repay the deferred amount in a lump sum in October with 6% interest.”
General Motors managed to end salary deferrals before expected.
“It’s a little bit of good economic news in the midst of a lot of bad news,” said a GM salaried worker, who chose not to be named.