No One’s Fault But Their Own
Monday, April 20, 2009 at 5:16 pm
You might have heard that Detroit’s automakers have been struggling recently, and also that the federal government has stepped in with offers to help the dying companies weather the storm if only they’ll revamp their business models and make some concessions regarding employee compensation.
Well, it seems that some industry executives haven’t been willing to take the pay cut. The Washington Post reported today that Chrysler Financial — the lending arm of the withering automaker — lost out on $750 million in federal help because some executives refused to accept Washington’s pay limits. The development means that the company will have to take out its loans from private banks at higher rates, according to The Post.
Most of the agreement was in place, sources said. But on April 7, Treasury asked Chrysler Financial to have its top 25 executives sign waivers regarding their compensation, according to sources familiar with the matter who declined to talk publicly because they were not authorized to speak.
Within a week, the company responded that some of the executives had refused to give their approval. By last week, Treasury had rescinded the loan offer, the sources said.
Chrysler Financial is denying that this is the case, arguing that the company — which has already accepted $1.5 billion in emergency help from Washington — is healthy enough that it doesn’t need more, The Post reported.
“Chrysler Financial has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such no additional TARP funding is necessary at this time,” the company said in its statement.
That turns this into an all-too-common he-said/she-said saga — and all the sources anonymous. We’re eagerly awaiting more details.
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