American-based Group 1 Automotive, owner of the UK business Chandlers BMW/Mini, is implementing a cost reduction scheme involving pay cuts for its top executives and board of directors.
Group 1’s executive team, regional vice presidents and board of directors have voluntarily agreed to take a 10% reduction in pay until economic conditions improve.
In addition, a 5% compensation reduction will be implemented for all other corporate staff. These moves are part of a broader cost reduction initiative that Group 1 is implementing in response to the present economic environment.
Earl J. Hesterberg, Group 1’s president and chief executive officer, said: “Ongoing economic uncertainty combined with an overall decline in industry sales of nearly 35% in the fourth quarter of 2008 requires that we take these difficult but necessary steps to closely manage Group 1’s expenses in the coming year.”
Hesterberg said the company would continue to work with its field staff and manufacturer partners to streamline operating costs.
In total, Group 1 is targeting $100 million (£69m) in cost reductions this year as compared with the prior year.
This represents a significant acceleration in cost cuts from a $35m (£24.2m) target that was previously announced in October.