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Chrysler gives bonuses, asks for bailout

Posted Nov 14 2008, 12:52 PM by Kim Peterson
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Chrysler is asking the government for a bailout. It's laying off employees and cutting salaries. It's a company in trouble.

Oh yeah, it's also paying $30 million in bonuses to dozens of top executives.

That's the end result of a poorly-timed plan to keep Chrysler together as it was being sold. The company didn't want top executives to leave during the transition, so it promised big money for people who stuck around. Now, Chrysler is asking the government for billions of dollars in aid while it writes million-dollar bonus checks out to A-list employees. How's that for awkward?

In Chrysler's defense, this bonus plan was created in April of 2007. The company had no idea that its industry was headed for collapse, or that the executives it was desperate to keep might have a hard time finding employment at a Jiffy Lube at this point.

The bonuses are going to be another sticking point in Chrysler's request for government aid. The industry is asking for $25 billion in low-cost government loans. Chrysler is a private company, and may be asked to hand over a lot of information about its finances and how it handles its money. That includes information on those controversial bonuses.

Bonuses are under fire at other carmakers. Ford has cut some merit raises and bonuses for next year. The company is quickly running out of money, and is slashing its spending.

Executives from Chrysler, Ford and GM are headed to Congress next week to make their case for $25 billion in aid. The bonus numbers will quickly become a central point of the conversation, and deservedly so. 

As a private company, Chrysler can do whatever it wants when it comes to compensating its executives. But a private company asking for a government bailout cannot. Better brush up on those resumes, boys, because the good times are coming to an end.

Related reading:

Obama floats $50 billion automaker bailout

Should GM just file for bankruptcy?

Automakers ask for bailout to keep wheels turning

The death of the minivan (and Chrysler?)

 

Comments

 

Don't give them anything as far as bailout. let them sink or swim. If the top executives were worth their pay, they would stay and help save the company. These top execs have no character, they just want to get the big bucks and get out.

Jerry is correct. let them fal.l let it be a lesson for those that think bad decision making will be rewarded with a bonus from the tax payers!!!

I agree here at my compnay this year there is no Christmas bonus or other end of year bonus. This is just sickening and should stop. I wish i could stop paying taxes and keep all my money and that might help me make my monthly mortgage payments, gas, food, electric and other expenses after losing roughly 12,000.00 of income.

Remember the last time Chrysler got a bailout ?  Lee Iaccocca took a $1.00 per year salaryt until the loan was repaid.  He did not get  bonus to stay.  He stayed and brought the company back.  Take a lesson execs!!!!!!

Don't give ANYONE seeking government bailout money bonuses period..... Call your congressman and senator at home and tell them... NO BONUSES

I'm sick and tired of reading about these top execs getting excessive bonuses, and even more angry that Chrysler would give bonuses and then expect the government (me and millions like me) to bail them out.  I do not think any auto company ought to be helped UNLESS the government makes the unions that have driven prices through the roof renegotiate the terms of these contracts.  No one is guaranteeing me a pension, great medical at low cost, a raise in salary.  Let these workers suffer like the rest of us......deal with it or go find another job!

This has gotten completely out of hand with the bailouts!!!  Sink or swim as Jerry said..............NO MORE GOLDEN PARACHUTES!!!  How can these bonuses can be honored while asking the taxpayers to pay for them!!! Outrageous and don't get  me started on the banks, mortgage companies and so on............AAHHHH!!!!

COMPLETELY ABSURB!!!  How can any member of Congress explain this to his/her constituents.  GIVE THE EXECS THEIR PINK SLIP, WITHOUT ANY BONUS.  

Enough is enough. I was upset when we bailed out Wall Street and now they want bailouts for the Auto Industry. I say no, I am tired of all of these people making big bonuses and the average American Taxpayer having to foot the bill. My taxes are high enough as it is---will go higher because of the Wall Street bailout---and to add the Auto Industry---I SAY NO WAY!!!!!

This is the insanity that is the American Auto Industry. The entire industry needs to be overhauled from top to bottom before this country should even do something as stupid as think about a bailout. All of the execs should be fired and start new. Bring in people with knowledge on how to make business successful without ties or predisposition to the auto industry. We need to kick out the union out of the Big Three. They have strangled our ability to be remotely competitive globally. We also need to demand that jobs are moved back to the U.S. with a working wage. If Honda and Toyota can do it, so can we. There needs to be a portfolio that consists of increased gas mileage and alternative energy vehicles. Only then could this industry have a snow balls chance in hell of surviving.

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