LCI Industries, which supplies components for commercial vehicle OEMs through its Lippert Components subsidiary, says it is establishing an emergency fund for team members facing personal and financial difficulties due to the COVID-19 health crisis.
The company also said it will participate in relief efforts at all of its facilities, including donating personal protective equipment and other supplies to local communities, and manufacturing approximately 56,000 medical face shields for doctors and nurses in Italy. LCI also is encouraging and supporting employee-initiated volunteer efforts.
In addition, the company is making or considering business moves in response to the outbreak, including suspending production at several facilities, “rightsizing” its workforce and reducing the salaries of executives.
“During this unprecedented crisis, the health and safety of our team members remains our top priority,” said Jason Lippert, LCI president and CEO, who is reducing his base salary by 25%. “At the same time, we are taking the necessary steps to mitigate the long-term impact of this prolonged macro-economic uncertainty on our business stemming from the COVID-19 pandemic. As a result, we have taken substantial actions in response to this rapidly changing environment, including implementing broad-based reductions in compensation, delaying non-essential capital expenditures, and eliminating discretionary spending. We believe these steps will be critical to maintaining a strong, flexible financial position.
“Now more than ever, our operational discipline and track record of successfully navigating various economic cycles will prove critical to ensuring we emerge from this crisis a stronger, more nimble company.”
In addition to the previously announced temporary suspensions of production at select manufacturing facilities across the US and Europe, LCI said it is making the following compensation adjustments:
- Jason Lippert and Ryan Smith, senior vice president of operations, will reduce their base salaries by 25%
- The executive leadership team, general managers and other executives across the company will reduce their respective base salaries
- The LCI Industries board of directors will reduce its quarterly retainer by 25%.
The company said it will continue to review executive and director compensation, as well as other salaried personnel costs, to identify other potential cost-saving opportunities.
Other cost-saving measures LCI has implemented or is considering include:
- Rightsizing workforce to match current demand levels
- Delaying certain capital expenses and reducing or eliminating non-critical business expenses
- Temporary hiring freezes in all locations and furloughs for non-critical team members
- Postponing merit increases for salaried employees until the end of the fiscal year
- Continually engaging with strategic banking partners regarding appropriate options relative to future financial liquidity
“In this difficult period, I want to again express my gratitude to all our team members for their extraordinary leadership,” Lippert said.