Of course not. It’s going to take a whole fistfull to make this spaghetti western happen. The Freep reports that when he replaces Bob Nardelli as Chrysler CEO, Marchionne will remain an employee of Fiat to avoid Treasury limits on executive compensation at firms receiving “extraordinary assistance.” Under these rules, compensation of Chrysler’s top executive is limited to $500,000 excluding restricted shares of stock. Marchionne earned around $4 million last year. Citing bankruptcy documents, the Freep explains that “under the deal, any of Chrysler’s top officers can be deemed a Fiat employee who’s “seconded” to Chrysler, and therefore take pay from Fiat beyond the Treasury cap.” Since Chrysler does just about everything “in consultation” with the Treasury these days, it’s hard to understand why Geithner’s own rules are being so blatantly flaunted. Oh well.
So will New Chrysler be a subsidiary of Fiat or a separate company or what? How can Marchionne be CEO of two separate companies? If the companies will be combined why are they constantly referred to as separate companies?
Since Marchionne will apparently be holding down two jobs, CEO of Fiat and CEO of Chrysler, it is reasonable for him to take pay from two sources. Steve Jobs did this while he was CEO of both Apple and Pixar while Goshn likely does it with his Nissan/Apple gigs.
Usually holding down two full time jobs is the sort of thing struggling single parents do, but there are exceptions.
Chrysler’s sorry state revealed:
http://money.cnn.com/2009/05/11/autos/chrysler_bankruptcy_filing.fortune/index.htm
Seems Fiat is where old automakers go to die…Like Florida and humans…Marchionne even looks like an undertaker.
Looks like the Soft Drink will have to be satisfied with limiting the pay of GM execs (unless GM is bought by Carlos).
Very interesting, thoughtful, and exhaustive summary from Frank Ewasyshyn (Chrysler Exec. V.P. of Worldwide Mfg) as part of his testimony at the Bankruptcy hearings, arguing why an expeditious sale to FIAT should proceed. Although it’s commonly believed that the impact of a wholesale Chrysler liquidation, or demise of critical suppliers, could send shockwaves through the industry as a whole, this affadavit actually attaches $$$’s to the Chrysler costs….worth the read.
Aside to RF: Might this be a stand-alone item for purposes of separate commentary? Wasn’t sure how you started new discussion threads, but this seemed a reasonable repository into which to slot it otherwise….
http://www.bankruptcylitigationblog.com/uploads/file/Frank%20e%20decl.pdf
That picture is just sad.
Utilities worried about getting paid in Chrysler bankruptcy:
http://rumors.automobilemag.com/6538032/news/utilities-demand-payments-from-chrysler/index.html
Imagine that: a European CEO paid more than an American one.
Chrysler’s time in bankruptcy understated:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJa0P8qxSNgo&refer=home
@eyeonthetarget
Thank you for an informative read. Frank Ewasyshyn explains Chrysler’s situation in manner that anyone can understand. Does he have ulterior motives? Without a doubt. Is he speaking the unvarnished truth? In my opinion, absolutely.
Chrysler is worth saving. Or at least the attempt to save. Prior to Mark Eaton’s sell-out, Chrysler was at least willing to try to change and innovate. Maybe they would have succeeded, maybe not, but deep down inside the company were people who thought that it was worth the try. Daimler gutted Chrysler (regardless of the money that DCX lost, at the end what remained of Chrysler was a shell of its former self), but inside still beats that heart, the one that has, time and time again, resurrected Chrysler from the brink.
The downside to letting Chysler fail may be the “domino effect” that could take down hundreds of suppliers and Ford and GM in it’s wake. Well, really, GM is going into Chapter 11 inside of three weeks almost certainly, but Ford and multiple other companies might be able to tough out the next quarter or two without any further intervention from the PTFOA if Chrysler can be sustained until FIAT assumes complete control. The spectre of North America without a viable manufacturing base scares the sh!t out of me; it’s a possibility if we don’t fix what we can.