DETROIT -- Seating supplier Adient plc is cutting the salaries of U.S. non-plant employees by 20 percent in an effort to remain solvent during the ongoing COVID-19 crisis.
The company did not respond to inquiries concerning how many employees face the cut. The company employed roughly 1,300 non-plant salaried employees in the U.S. in November.
The cuts include the salary of CEO Doug Del Grosso and the company's board of directors. Del Grosso earned a salary of $1.15 million with an $800,000 bonus in 2019. His total compensation package was worth roughly $15 million, but a bulk of that value was linked to stock awards that likely plummeted in value.
More suppliers this week announced layoffs in the expected bloodletting in the automotive supply base as the region reels from the impact of production cuts stemming frmo the coronavirus outbreak.
Shares of Adient (NYSE: ADNT) are down more than 58 percent to $11.78 since Feb. 20. The company's market cap has cratered by more than $1.5 billion during that time frame. Shares rose 8.8 percent in early trading on Thursday amid overall market gains.
"As the pandemic spreads around the world, the automotive industry is among those being impacted in unprecedented ways," Del Grosso said a letter posted on the company's website. "While production is slowly resuming in China, our customers are suspending vehicle production across Europe and North America, which dramatically affects our operations as their partner. Adient has taken proactive and immediate action to address these unanticipated events and the tremendous amount of uncertainty as to when production will resume. Our top priority is to reduce our cash burn rate and increase our liquidity."
On March 20, Adient announced it had drawn down $825 million of its revolving credit to bolster its cash on hand to outlast the virus's impact on auto sales and production. Adient now has $2 billion in liquidity, Grosso said in his letter.
The company also declined to comment on which plants were currently shut down or would shut down in the coming weeks.
"As a JIT (just-in-time) supplier, our plants follow our customers' production and/or shutdown schedules," Mary Kay Dodero, director of communications for the Americas, said in an email. "In addition, we are complying with all governmental guidelines in the states in which we operate."