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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

 

Write your senator.....I already have, Saxby Chambliss, and he said he would not support any such bail out....I'm not working.....can I get a bail out ????  

This bailout is becoming a farce. It has not done one thing to save the economy except to give execs a big bonus as they laugh at us the people who are actually bailing them out. Let the auto industry start making affordable priced cars or else close their doors and save the public their money. Get rid of the worthless execs and hire a real working person.

How can these f 'n execs even still have a job more or less a bonus???  The line at the government handout counter will get longer.  Every large company that is having a hard time will get in line, claming they can't fail because it would hurt the economy.. Let them all fail and concentrate on the middle class workers of these companies.  Spend the billions on small business which are the heart of this country.  Give the displaced workers the money to become business owners  and tell the execs to go to H@#%!

Give me a break about the unions running the prices through the roof.  I don't think most unions employees are bringing homes 6 figures let alone any type of bonus..............  You obviously don't live in a union household.  Most of us are still living week to week. Not Lavishly.  

The big "loser" 3 will continue to trim down their work force while their top executives get bonuses.  Usually when a company does not make money for the year, bonuses are frozen.   As houses continue to forclose and the value of these houses drop in Michigan and thousands are out of work, these crooks ( I mean top executives) make large bonuses  No wonder why Honda and Toyota are the top auto manufacturers  now.   Let the big 3 fall.

Interesting slant Phantom.  But let me ask this:  As part of the contract, wouldn't one expect there would be some sort of performance clause?  I won't buy anything that doesn't have at least some kind of warranty.  And, of course, we are talking about 2007 through November of 2008, not a great span of time.  I think that seppuku clauses should be written in also.  Too much politics, not enough foresight.  

Is this a joke!  They deserve to go under.  Lets see how long it takes these execs to find a job!  I would rather not take the bonus and keep my job.  If they had been doing their job, they might not be in this mess!  

RE: Obama was just elected A WEEK AGO--he hasn't even taken office yet!!! Shut the F up and stop whining--yuo really expect the whole country to do a 180 in a friggin week??? Wake up!

Let Chrysler go down like the rest of them! Who cares what happens after that, we are use to living like rats already, now it's their turn! All of this is nonsense and it's time that all of these companies reap what they have sown!!-"GREEDY" bunch of non-working waste of human flesh!! You're worried about the economy??-to late for that now. All of these big fat lazy "GREEDY" enterprising waste of human fleshy's have lined their pockets for years and years. Wake up people, quit being played like a bunch of dummies!! Bailouts?-all for those big fat lazy "GREEDY" enterprising waste of human fleshy's are getting more money now than before!!! The people of the world need to show how to get revenge, keep right on backing off your spending and watch how the prices will drop!! This is the problem with America, the people do have the power to change things on their own, if they would all stick together!!!!!!! We have paid our taxes and look what they have done with "OUR" money!!!

OK, so add Chrysler to my list of companies not to do business with. If these top executives would refuse the bonuses and insist the $30 Million be used to help the company stay afloat or give those being laid off a severence of sorts I would go out and buy a Chrysler. We as a country should stop supporting these compaines and spend/invest our money in companies whose top executives only care is whether to get the 75 or 100 foot yacht with thier bonus. I always thought bonuses were given if you did well, apparently not. It is more like the worse you do your job the bigger rewards.  

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