The Trump administration is asking auto parts manufacturers to pay a smaller percentage of their revenue to workers, a move that could increase labor costs and force companies to cut jobs.
The Trump administration sent a letter to the manufacturers in April asking them to pay $1.5 billion in 2018 to workers who receive a bonus that exceeds a percentage of revenue, according to the Office of Management and Budget.
The bonus would be based on the amount of sales they have generated for a certain year.
If the company fails to pay the bonus, the agency will take over its operations and impose new labor and business standards, the letter said.
The letter was sent to the companies, which include General Motors Co., Ford Motor Co., Fiat Chrysler Automobiles NV and Chrysler Group LLC.
The companies could face higher costs and be forced to cut back on operations, which could also result in layoffs.
Trump has previously said he would impose new rules on businesses to make them more efficient and accountable.
Auto companies have argued the bonus is designed to incentivize them to keep employees on payroll, which has helped them boost sales.
“The goal is to help the industry and the companies make more money,” said Gary D. Burdick, a senior economist at B. Riley & Moulton in Stamford, Connecticut.
“We don’t think that’s going to happen.”