When the history of the 2008/2009 federal bailouts is finally written, the chapters on Cerberus’ federal teat suckage will contain some of the best/worst examples of insider sweetheart deals between failed financiers and Uncle Sam. Deals that protected their protagonists from genuine accountability for their actions, and inaction. Case in point: Cerberus-owned GMAC’s eleventh-hour, Christmas Eve exemption from FDIC banking laws. GMAC’s Board Member, former U.S. Treasury Secretary John Snow, brokered the get-out-of-C11-free card and subsequent $6 billion bailout. Dirty? How about the fact that GMAC’s then-Chairman’s J. Ezra Merkin’s was up to his eyeballs in Bernie Madoff’s Ponzi scheme. OK, so, here we are. When federal Pay Czar Kenneth J. Feinberg announced that executives at ChryCo Financial wouldn’t get as close a haircut as their colleagues everywhere else, his explanation let the C11 cat out of the bag.
Feinberg said that Chrysler Financial ‘contends that the risk of employee departures must be minimized because Chrysler Financial has stated it intends to wind down its operations and will have difficulty attracting new employees.’
Feinberg said Chrysler Financial’s cash compensation will decrease 30 percent over 2008 levels for the top 25 executives — compared with 50 percent at most other firms. Overall compensation will fall 56 percent at Chrysler Financial — compared to 90 percent on average.
Chrysler Financial will pay its top executive $1.5 million and $1.35 million for a second executive. Two others will receive $800,000 and $600,000. The remaining top 21 will make no more than $500,000.
This report from the The Detroit News is, in a word, revolting. By what twisted logic is it OK to pay a company’s executives MORE when they’re heading for dissolution rather than recovery? And not just because Chrysler Financial has been quietly screwing Chrysler, Dodge and Jeep dealers to facilitate its exit strategy.
Dealers for months have been of the opinion that Chrysler Financial was trying to collect on all its outstanding loans in preparation for liquidation of its $26 billion portfolio, down from $60 billion at the start of the year.
The finance company’s global work force has shrunk from 4,000 in January to less than 2,700.
So much for saving American jobs. For those of you who say that the bailouts were necessary to keep America’s economy from tanking, remember that not all bailouts are alike. Or, put another way, some are worse than others.
It’s bad enough that tax dollars were used but so were investor’s money that was literally stolen. Misrepresentation and deceit are not only immoral but illegal.
And the final insult came later when This Administration had the nerve to call the last few investors out on the carpet as “evil” and “greedy”.
Having watched their money be looted for years I’d call them courageous for hanging in as long as they did.
Working at a Chrysler dealership as this stuff was unfolding, I’d like to say that many despicable things will come to light. I for one, would like to thank TTAC. You guys have been on top of this debacle since I found this site. It’s good to know someone out there will report this stuff. The outrage is almost non-existent out of the “car” world. Hopefully the mainstream can take a lesson from you guys, and quit burying these atrocities Cerebus and the gov’t inflicted.
If only there was a way to let Obama know about this injustice. He would fix everything….
_ sarcasm off _
Seriously, did anyone expect anything different?
By what twisted logic is it OK to pay a company’s executives MORE when they’re heading for dissolution rather than recovery?
RF, you need to do some research into executive pay at companies that are winding down. As bizarre as this is, it’s not atypical.
Believe it or not.
FreedMike :
RF, you need to do some research into executive pay at companies that are winding down. As bizarre as this is, it’s not atypical.
perhaps but is it atypical for them to do it on our dime? why exactly did we agree to bail them out again?
thanks, bob, for shining a light on this one.
LW, while your at it, you can notify Bush since that mess was started by his administration.
Cerberus may have screwed Chrysler Financial employees and Chrysler dealers, but CF hasn’t screwed us taxpayers. They paid back the TARP loan months ago. (Unlike the U.S. Treasury’s pet, GMAC).
BTW, RF, Cerberus has two e’s not three.
Aaron Burr is alive and doing extremely well today.
So, ex-Amtrak (the Soviets tried to emulate how “well” our John Snow did but it seems that if you’ve killed off the imperialists 1x vs our superior system of slowly bleeding capitalists … ) honcho/then more “train-Ing” to master the black arts of legalized kleptocracy before Bushing it to become US Treasury Sec’y and another Chief Thief … Outrage is enormous that these guys don’t care about Quality, let alone Made in the USA …
Ugh. I wish they would have just let all of Chrysler die.
A lot of these threads go down the “Well, Bush started it” or “Obama’s doing xxx now” angles. Can we agree that both parties are responsible, and are using tax money to benefit a chosen few?
I am just sick of all of this bailout stuff, the pay czars, and the like.
I can’t wait until the federal government has been completely repaid its TARP funds and has completely divested itself of its stakes in the banks and automakers.
“I can’t wait until the federal government has been completely repaid its TARP funds and has completely divested itself of its stakes in the banks and automakers.”
mattstairs, I wouldn’t hold my breath….
Another excellent reason not to buy an American car.
Don’t you just love the position our federal government has put us in?
Buy a GM/Chrysler car, and you’re supporting their stupidity and only delaying the inevitable.
Don’t buy a GM/Chrysler, and you’re speeding up the destruction of our taxpayer “investment”.
Thanks, guys!!! Awesome job!!!
I thought TTAC had predicted that Cerberus wanted to keep Chrysler Financial so they could merge it with GMAC. What happened to that? And if they repaid the Tarp money, do they have to liste to Feinberg or any of Obama’s minions about how much they pay their employees?
Current lawsuits against Chrysler Financial may impact Cerberus in finding a money trail for settlements. For more information go to lawsuitsagainstchryslerfinancial.com