Daimler chief executive Ola Kallenius said that his company, as well as the car industry as a whole, are facing painful salary cutbacks due to the economic fallout caused by the COVID-19 pandemic.

This situation will result in carmakers having to restructure their business more harshly than they originally thought, said Kallenius during a webcast hosted by the German manufacturer’s main labor union, IG Metall.

This “significantly harsher reality” will require “drastic” salary cuts, he added, while also mentioning the fact that Daimler executives will face bigger reductions than rank-and-file workers, reports Autonews Europe. These cuts are necessary to protect the company’s financial status and safeguard its investments in future technologies, he said.

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Back in April, Kallenius indicated that previously planned measures might not be enough to counter where the market was going. Right now, Daimler, as well as the VW Group and BMW are all bracing for second-quarter losses.

In March meanwhile, Kallenius did say that his company’s wasn’t in need of any additional funds (via state aid), claiming that the industry had “a very good order intake before the crisis.”

One development plant that has already been sidetracked is Daimler’s co-op deal with BMW, which would have seen the two companies co-develop next generation autonomous driving and parking technologies. These systems should have made it onto passenger vehicles sometime in 2024 and beyond.

However, the two carmakers put their business on hold temporarily to pursue individual development paths.