Chrysler and General Motors are seeking concessions from all levels in order to successfully emerge from Chapter 11 bankruptcy – including former and current executives. As such, the pension plans of some high-level execs look to be in jeopardy as the automakers continue to cut costs in bankruptcy court.
Former and current executives of Chrysler and General Motors – such as Rick Wagoner, Bob Lutz and Lee Iacocca – could stand to lose several millions through the companies’ Chapter 11 filing. In fact, Chrysler has already yanked Iacocca’s two company cars – a Chrysler 300 sedan and Town & Country minivan. But the execs stand to lose much more than their company cars.
Former GM CEO Rick Wagoner’s pension plan is valued at about $22 million and is currently still on the automaker’s payroll. GM’s board of directors and President Obama’s auto task force failed to address the issue prior to the company’s bankruptcy filing, leaving Wagoner still on the books.
It remains to be seen how much Wagoner’s pension plan will be worth after GM completes the bankruptcy process, but he will retain at least part of his current pension.
Those executives from Chrysler won’t be so lucky. Chrysler has decided to leave some executives’ pension plans in the ‘bad’ Chrysler, where they will likely stay for years to come. Even after the ‘bad’ Chrysler emerges from bankruptcy, there is no guarantee those plans will still be around.
Bob Lutz, former CEO of Chrysler, revealed to The Detroit News that his Chrysler pension has already been reduced, but decline to say by how much.
“In light of the many contributions you have made to Chrysler over the years, we regret the need to take this difficult action,” Chrysler wrote in a letter to former executives.
However, it’s unlikely we will even know the final amount doled out to former executives as both car makers are now privately held.
