Tesla is among the latest companies brought to its knees by the coronavirus. The auto maker has been forced to cut salaries and furlough workers until May 4.
The U.S. is at an unprecedented period in its modern history. Companies that once seemed invincible are being forced to adjust to the effects of the coronavirus pandemic.
It is still too early to see the actual financial damage brought about by the virus, but it would seem like 2020 isn’t the year for companies to grow.
Instead, this year is when top companies around the world will be put under a magnifying glass to see how they will deal with the crisis.
Tesla employees to go on leave
The California-based car manufacturer is suspending the operations of most of its factories across the U.S. until May 4.
The furloughs will begin on April 13. Employees who will not be able to work from home will not be paid. Alternately, employees are being encouraged to apply for unemployment benefits.
On the other hand, employees that are deemed to be essential to the operations of the factories and the company will continue to work.
Pay cuts across all levels
Tesla will also implement pay cuts for its salaried employees, starting with a 30% pay cut for the vice presidents, 20% for director levels, and 10% for the rest of the workforce.
The company justified this plan of action as a shared sacrifice that will carry the company through these unusual times.
This, too, shall pass
Tesla is confident that it will be able to weather this down period because of its cash reserve liquidity. It remains that way, despite Tesla probably having a negative year-on-year return for the first two quarters of the year.
It is reported that the company has a US$3 billion (AUS$4.8 billion) credit line that it may use. This includes all working capital lines that can even support the expansion of the factory in Shanghai.
Tesla’s coronavirus support
Last week, Tesla CEO Elon Musk donated ventilators that his company bought from China. Additionally, the company is also setting up its production line to use its own Tesla Model 3 infotainment as a crucial part of a ventilator.
The infotainment system will serve as the ventilator’s main processor, which controls the flow of the air to its user.
On the flip side, Musk is also on a mission to create his own Tesla ventilators to help solve the shortage. He committed that these items shall be ready “as soon as humanly possible.”
Images courtesy of Tesla and Pixabay