Fiat: We Just Want the Money, Not the Rules
May 13, 2009
By Bill Visnic
Let the "loopholing" begin.
Fiat S.p.A. made it clear it wouldn't go through with its no-investment alliance with now-bankrupt Chrysler unless the American automaker was guaranteed to be the recipient of $6 billion (and probably more) in federal loan guarantees.
Now that Fiat is all but assured of favored-bidder status in the Chapter 11 bankruptcy auctioning of Chrysler's assets and the subsequent Fiat-Chrysler alliance is on track -- as are the federal billions earmarked for the "new" Chrysler -- Fiat's revealed some intriguing new financial sleight-of-hand: an end-run around executive-compensation limits imposed on companies that accept government handouts.
The Detroit News reported that the fine print in the latest Chrysler bankruptcy filing indicates select top executives at the "new" Chrysler will be listed as Fiat employees, allowing Fiat to do a legal end-run around new rules from the U.S. Dept. of Treasury limiting executive compensation for companies accepting loans from the famous Troubled Assets Relief Program.
The rules say pay for execs of companies supping at the federal trough cannot exceed a half-million dollars per year. Fiat apparently believes that won't be sufficient for top-dog suits trying to turn around the new Chrysler, of which Fiat will own 20 percent.
The paper says the $4.1 billion Treasury currently extended to Chrysler to see it through bankruptcy comes with the stipulation that the company's top 25 executives are subject to the compensation limit.
Posted by Bill Visnic at 8:24 PM under Business , Chrysler , Companies , News | Comments (3) | digg this | Seed Newsvine
There has to be something that the US gov can do about this. This is just wrong and IMO never liked the merger in the first place. Giving Fiasco Fiat money for nothing is insane. They arent putting up anything not to mention that by the time their socalled cars make it here under a Chrysler name plate they will be about three years old and ready for a redo anyway. I really really hope we dont allow this to happen. Its insulting to the American people. If this is the case why dont the Task Force just liquidate Chrysler.
Posted by: nitephire | May 14, 2009 at 7:21 AM
That is wrong! In simple words they get "tax payer money" and don't follow any rules! this is going to bring a lot of consequences. I see the sale of JEEP for cash.
Posted by: iskch | May 14, 2009 at 8:32 AM
Well, those autoworkers are going to be living on the taxpayer's dime either way. We might as well keep them working.
Posted by: stephen987 | May 15, 2009 at 11:14 PM