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Bankruptcy is cruel.
The man credited with saving Chrysler the first time around now must buy his once-free cars or give them back by Sunday.
Lee Iacocca, now 84, led a Chrysler turnaround in the 1980s that hinged on the federal guarantee of $1.5 billion in loans, guarantees won largely on the charismatic executive’s persuasive appearances before Congress and masterful public-relations moves such as cutting his salary to $1 a year. He later became the public face of his company, pitching cars personally with the line, “If you can find a better car, buy it.”
Chrysler averted bankruptcy, repaid the loans seven years early and enjoyed nearly two decades of prosperity before its merger with Daimler-Benz In 1998.
This time around, though, Chrysler actually filed. Its plan for emerging from Chapter 11 would create a "New Chrysler" that's owned by unions, the U.S. and Canadian governments, and Italian automaker Fiat. The $2 billion sale of assets from Old Chrysler to New Chrysler could be approved as soon as today.
<span style="font-style: italic">But Iacocca and other former executives and board members won't see a return of this time-honored Detroit perk. And it's likely they won't see much of their pensions, either, which are unsecured claims that will be paid behind those of secured creditors.</span>
For those interested, Iacocca's chosen rides were a Town & Country minivan and a 300C sedan.
<span style="font-weight: bold">Chrysler's statement:</span>
“Bankruptcy law does not allow Chrysler LLC to continue providing former executives and Directors with use of a Company Furnished Vehicle. In addition, the proposed transaction with Fiat does not contemplate reinstituting the program in the future. As a result, Chrysler has informed program participants of their options to either purchase their vehicle at fair market value by securing personal financing or turning their vehicles in to the Lapeer Road Marshalling Center (or to a local dealership if they do not reside in Southeast Michigan).
We regret the need to take this action but it is important that the Company be in compliance with the requirements of bankruptcy law.”