Berkshire Hathaway, investment company run by Warren Buffett, owns 10% of the Chinese automaker BYD. News was just released saying that the automaker needs to cut its workers payments between the months of June and September. The reason being that it is struggling from weak profits and sales. This was reported by Chinese media earlier yesterday.
The pay cuts being handed out at BYD are going to be across the board in every department. It will be a combination of lower bonus payments and salaries and it will reduce the overall combination of the two by 14%, which was reported by Southern Metropolis Daily yesterday as well. This move is expected to save the company the equivalent of $38 million, which is also 240 million yuan.
A struggling BYD has been experiencing very slow growth in the auto market in China, which is currently the largest auto market in the world. The company has dropped 89% in first quarter profit due to 8% lower sales volume when comparing the statistics to the same three months of last year.
The company also suffered a major image setback. One of their battery run cars was in a collision last month and it caught fire. Shares of the company have fallen around 40% in this last year.
Wang Chuanfu, chairman of BYD, is ranked number 56 on the Forbes China Rich List for 2011. His estimated wealth is $1.52 billion.