General Motors Co., which emerged from bankruptcy after receiving $50 billion in federal aid, is restoring salaried and executive pay cuts for workers in the U.S., Canada and some foreign countries.
In an e-mail to workers Friday obtained by The Detroit News, Mary Barra, vice president of global human resources, said the cuts, which saved about $50 million, are being restored effective Sept. 1. The pay restoration was reviewed this week by GM’s board of directors, which met in Detroit on Tuesday and Wednesday.
Senior executive pay cuts, however, are not being restored.
“Your continued commitment and dedication throughout this period has been remarkable,” Barra wrote. “However, we are just beginning our reinvention of GM, and there is much yet to be done. We appreciate the sacrifices you have made during this historic transformation and appreciate your continued efforts as we build a successful new General Motors.”
GM decided to restore the salaries now that the automaker has emerged from bankruptcy as a leaner company and is completing staff reductions that will eliminate more than 6,000 white-collar jobs by the end of 2009. GM started the year with 29,650 white-collar workers and wants to end it with 23,500.
“Keeping the cuts in place hurts the ability to attract and retain good people,” GM spokesman Tom Wilkinson said. “We’ve got a much smaller company now and the quality of our people is more critical than ever. We are in risk of losing good people.”
The temporary pay cuts were unveiled in February, implemented in May, and slashed executive base salaries 10 percent while many other workers saw cuts ranging from 3 percent to 7 percent.
About 27,000 workers in the U.S. will see their pay restored, but the move does not undo pay cuts imposed on senior executives, Wilkinson said.
President and CEO Fritz Henderson has taken a 30 percent pay cut and will be paid $1.3 million this year. Three others: Vice Chairman Bob Lutz, Chief Financial Officer Ray Young and Tom Stephens, GM’s vice chairman for product development, took 20 percent cuts. GM has submitted a list of its highest-paid employees for approval by the Treasury Department’s special master, Kenneth Feinberg, and is awaiting approval.
But the Obama administration will not make public the detailed compensation plans for the highest employees at seven companies — including GM — that have accepted bailout loans.