"The new Chrysler-Fiat partnership will get around U.S. restrictions on executive pay by having its top officers deemed Fiat employees," the Detroit Free Press reports:
The new Chrysler is among the first companies to fall under rules outlined in February by Treasury Secretary Timothy Geithner, for companies getting "extraordinary assistance" from the Treasury that would cap pay for top executives at $500,000, excluding restricted shares of stock. The final rules for the limits have not been released. . . .
Fiat CEO Sergio Marchionne has already indicated he will replace Chrysler CEO Bob Nardelli. But 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 any Treasury cap.
In our view, this whole deal is an abomination. The government should not be bailing out Chrysler or its unions; if it cannot make cars profitably, it belongs in bankruptcy court.
That said, we have to admire the Chrysler execs' sense of humor in using Fiat to evade a fiat.
1 comment:
this is a classic example of American ingenuity.
- Socialize the losses and privatize the gains.
- Forcibly take money from some to redistribute to others (in this case, the tax payers, to a private company)
- government intervention in the market. The government is forcing the market to produce more crappy cars (like we need more cars) when the market would naturally self-correct by closing failed companies and redistributing that work force to a profitable sector
- the money used to bail out these parasites is being printed at an unprecedented rate, thereby destroying the value of the currency already in existence and in effect stealing citizen savings through inflation
- stipulating how companies are able to run their business through salary caps is yet another step forward for government seizure of power
we are slaves.
the enemy is the State.
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