There was impassioned debate over the last 24 hours after this blog recommended against bailing out the Big Three automakers. Thanks for reading, and please keep coming here and contributing with your comments. Here is some more information that I picked up doing research that should be helpful to the ongoing discussion. As jobs are being cut, and the Big Three are requesting Federal Aid, Chrysler is nonetheless planning to pay over $30 million dollars in executive retention bonuses through the new year:
Even as Chrysler LLC cuts thousands of jobs and seeks federal aid to survive, the company still plans to pay about $30 million in retention bonuses to keep about 40 top executives. . . a retention plan needed to be put in place to protect human capital of the company,” [a spokesman] said, adding that the contracts were drawn for a “small percentage of key positions that were deemed to be critical to the company.”
Which Chrysler execs are getting the bonuses, the ones who succeed in negotiating the $52 billion bailout from the Federal government?
The $30 million bonus package is in addition to a large executive bonus paid out late last year:
Former Chrysler CEO Tom LaSorda, now co-president and vice chairman, received a $15.7million bonus from Daimler for helping with the sale of Chrysler to Cerberus. Reported earlier, LaSorda received a total of $20.7 million in total 2007 compensation.
So a corporation that is requesting billions in federal aid to remain solvent nonetheless was able to schedule $51 million in executive bonuses in the past twelve months. Facts like these increase doubts that a bailout is going to truly accomplish anything, other than ensure that Chrysler will have the funds to secure its “human capital” though 2010.