Thread: Chrysler gives 30 million in bonuses, asks for bailout

Chrysler gives bonuses, asks for bailout
by Kim Peterson Rating: Filed under: Ford, Kim Peterson

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.

http://blogs.moneycentral.msn.com/topst ... ilout.aspx

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.

Don't these guys read newspapers or watch TV? Or are those brain synapses malfunctioning? In the housing bubble that peaked in 2006, people were taking out home equity lines of credit to buy the cars and boats with no thought of being laid off: http://www.bls.gov/schedule/archives/mmls_nr.htm#2006 from the Bureau of Labor Statistics. By 2007, at least in FLA, people were already upside down in their mortgages, the flipping of real estate had virtually stopped and that state's major economic driver (tourism) was slowing. Any kid in kindergarten could figure out that of there is no income into your pocket you can't buy the daily candy bar.
And these Neanderthal thinking executives are going to get bonuses? (With apologies to Neanderthals).

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.

HUH! So business was booming in 2007? Just because the plan was created in 2007, doesn't mean you have to honor it if in fact the market goes south. Again, there is no obligation to pay a bonus! If these execs do not like it, they can go find a job at Jiffy Lube.

Who cares if these so called "executives" might have a hard time finding a job in this economy. That concern hasn't saved millions of Americans from getting the boot!

Some of these so called "executives" probably deserve to be out of work! They most certainly do not deserve to receive any bonus after asking to be bailed out by our government!

Some of these so called "executives" probably deserve to be out of work! They most certainly do not deserve to receive any bonus after asking to be bailed out by our government

You got that right!