Chrysler Turned Down Government Loan Over Limits on Executive Pay

[steven johnson]

When the Treasury earlier loaned Chrysler Financial $1.5 billion, there weren't significant limits on executive compensation. This time theTreasury asked Chrysler Financial to have its top 25 executives sign waivers regarding their pay. Whoops. Watch the rats scatter.

By David Cho and Peter Whoriskey Washington Post Staff Writers
Monday, April 20, 2009; 6:02 PM
Top officials at Chrysler Financial turned away a $750 million government loan because executives didn't want to abide by new federal limits on pay, sources familiar with the matter say.
The government had been offering the loan earlier this month as part of its efforts to prop up the ailing auto industry, including Chrysler, which is racing to avoid bankruptcy. Chrysler Financial is a vital lender to Chrysler dealerships and customers.
In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company.
Chrysler Financial denied in a statement that its executives had refused to accept new limits on their pay.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/20/AR2009042002156.html

[ChairmanAgnostic]

1. that, in a shell of nut, explains why it will soon be the Big Two

or maybe, the Medium Two.

[bamacrat]

2. Let em fail.

Fuck them, their cars are pieces of shit and have been for some time. We never should have bailed them out back in the 80s. Chrysler has made nothing but crappy cars since. They need to hope like hell Fiat will continue to finance them. Let them fail GM and Ford will absord a lot of their market. The tiny part they held.

[walldude]

3. Yeah fuck all those employees and their pensions

why should they get the money they earned, we should allow Chrysler execs to loot the company and fail, and fuck all those people who have worked 20, 30, 40 years on the lines who thought they were working for a safe retirement. Wal-Mart needs greeters.

[bamacrat]

5. Let them fail.

Chrysler should go under. Like i said inferior product and unwillingness to change equals unsustainable business model. I feel very bad for all the auto workers that will lose their jobs if this happens but GM has in principle agreed to the bailout terms and agreements, they're making changes to accommodate the current economy and the demands of government financing stipulations. Ford never needed the bailout gave most back will give the rest later. If it is only the big two then there is room for them to expand, reopen closed Chrysler plants to make GM/Ford cars, rehire laid off employees to stock ship and assemble said new vehicles. It really sucks that people are losing their jobs, my pay is being noticeably affected by the economy, but it is stupid and irresponsible to want to continue to pump money into a failed business that has no capacity or intention to modify their business practice to meet the demands of the current market. Chrysler products were not good, their quality was poor and they do not retain their resale value. President Obama even pointed that out. While GM and Ford trail the Japanese automakers Chrysler is next to last among auto makers in quality value and reliability.

But, the employees who will lose their jobs deserve everything they have earned. But their company losing value and becoming irrelevant to the point of going bankrupt because their CEOs wouldnt agree to not be paid huge gaudy bonuses in order to get bailed out, is just a very shitty part of life.

I do see one way where Chrysler could stay in business to an extent. They should drastically cut their line up, cut out minivans and suvs, and those weird part suv things, kinda like small station wagons. Anyway, if they became more of a niche car company like trucks and sports cars, which they do make well, trucks mainly. But the would be able to produce about seven cars and save a bunch of money. not everyone would be able to keep their jobs but some would.

[Romulox]

8. LOL at the "free marketeers" who conveniently ignore the trillions we're giving to banks!

"inferior product and unwillingness to change equals" $180 billion dollars of taxpayer money and counting (if your name is AIG!" :hi:

[Raineyb]

9. The executives are turning down government loans at better terms to keep their own salaries higher.

I'm pretty sure they'll make sure that the line workers have to make concessions. Apparently, only the little people have to make sacrifices.

Regards

[global1]

4. What Message Does That Send .........

when they turn down loans because they refuse to have any guidelines on their pay? Same thing with the banking and insurance industries that are either refusing the money or paying it back so they can get out from under any kind of government executive pay guidelines.

This is just despicable. Why aren't the 'teabaggers' incensed over this?

[Raineyb]

7. The message is sacrifice is for little people.

They'll gladly stick it to the line workers and try to squeeze every concession they can out of those workers but not cut a penny out of their compensation because they're so much more deserving.

Regards

[Supersedeas]

6. they'd rather file bankruptcy to 'jack-up' the employees salary/benefits and keep their own