Chrysler execs get bonuses
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.
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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.
-- "The king of Israel answered, "Tell him: 'One who puts on his armor should not boast like one who takes it off."