Chrysler execs get bonuses

Chrysler execs get bonuses
http://www.freep.com/apps/pbcs.dll/article?AID=/20070321/BUSINESS01/703210338/1014

Thirteen hundred top-level executives at Chrysler Group, which lost $1.5
billion last year, received bonuses last week based on the overall
performance of DaimlerChrysler AG in 2006.

In addition, DaimlerChrysler AG's management board approved
pay-for-performance increases late last month for all Chrysler salaried
workers that will go into effect in July, the Free Press has learned.

Advertisement

The July increase will be the first merit pay increase for the company's
more than 21,000 salaried workers since 2005. UAW members received a general
wage increase last year through their labor contract and have not seen
increases in the cost of their health insurance, which salaried workers have
experienced.

While the bonuses for the 1,300 executives are mostly tied to Chrysler
performance, about 30% is tied to DaimlerChrysler's overall performance.

DaimlerChrysler had a good year in 2006 -- its net income rose by 13.2% to
$4.3 billion. Chrysler was hindered by its truck-heavy lineup at a time when
consumers wanted more fuel-efficient vehicles.

The Auburn Hills-based unit is undergoing its second massive turnaround plan
in a decade, involving the elimination of 13,000 jobs over three years and
the reduction of annual vehicle capacity by 400,000.

Those new efforts announced last month, however, have largely been
overshadowed by speculation about Chrysler's future and potential sale.

A Chrysler spokesman confirmed Tuesday that bonuses were given and that
merit pay increases will go into effect, but he declined to disclose the
average amounts.

DaimlerChrysler was required to disclose how much it paid its top executives
recently in filings with the U.S. Securities and Exchange Commission. Those
filings late last month showed that Chrysler CEO Tom LaSorda received about
$3 million in compensation, including a $1.1-million annual bonus, plus $2
million worth of phantom shares that have a scheduled payout in 2010 and
that could change in value.

Ford Motor Co. announced earlier this month that it was giving all its
employees bonuses ranging from $500 for UAW workers to $300-$800 for
nonmanagement salaried workers. Some Ford workers voiced concerns about
receiving bonuses after their company lost $12.7 billion last year. The Free
Press heard similar concerns Tuesday about Chrysler's executive bonuses.

"I am not surprised Chrysler is doing this," said AutoPacific analyst and
President George Peterson. "One of the primary reasons they are doing it is
to be able to retain the people they want to. Ford has already
experienced -- and Chrysler could be close to experiencing -- a brain
drain."

Chrysler's 2006 performance was a change of fortune for the Auburn
Hills-based unit. In 2005, it was the Chrysler Group doing well while
Mercedes lost money.

Last month, DaimlerChrysler Chairman Dieter Zetsche announced that all
options are being considered for Chrysler and refused to rule out selling
the company.

Several companies interested in a possible purchase of company, which sells
vehicles under the Chrysler, Dodge and Jeep brands, visited Chrysler
headquarters recently to review the company's finances.

In Germany, the business newspaper Handelsblatt reported Tuesday that
Zetsche wants to increase DaimlerChrysler's profit margin from 3.6% to 6%
within three years.

 

DC may be having second thoughts about dumping Chrysler. DC may need
Chrysler to balance their books in the near future.

The recent Consumer Reports Annual Auto issue doesn't recommend any
Mercedes vehicles because of poor reliability; while CR doesn't mention
any reliability concerns with Chrysler vehicles, just poor fuel mileage
and lack of visibility.

IMO many newer Chrysler models are on the mark for reasonable size and
fuel mileage.
When Chrysler dumps the big stuff that isn't selling anymore things
should be much better financially.