Chrysler CEO Sergio Marchionne informed employees both salaried and by the hour that a performance reward is on the way, writes Automotive News. In a business e-mail, CEO Sergio Marchionne proclaimed that the good work employees on the industrial side have done to make it possible for 16 new or revamped cars to hit the sector in 2010 made the bonuses necessary. Perks can be sent out Feb. 11, said Chrysler spokesman Mike Palese. Resource for this article – Chrysler gives bonuses on strength of modified Q4 profit by Car Deal Expert.
Huge bonuses check for Chrysler employees
There can be $750 perks given to all hourly employees in Canada and the U.S. for Chrysler, reports Palese. There are 22,000 employees within the U.S. and 7,600 in Canada. Salaried staffs, numbering 10,000 in the U.S. and 750 in Canada, will receive an amount that Palese declined to reveal.
Chrysler plans to pay the perks despite having posted a net loss of $652 million this year with modified operating revenue of $198 million for the fourth quarter. In the Chrysler modified operating profit, interest on loans was not included. This included interest the government got on the TARP loans.
May not be the very best idea
The amount that Chrysler has accomplished is something Sergio Marchionne is proud of.
"It is a performance payment in recognition of what I consider to be extraordinary performance. … The way this house has responded to the introduction of 16 automobiles has been extraordinary," Marchionne explained. This was to analysts in a conference call.
All the taxpayers who footed the bill for the auto bailout are upset that Chrysler is sending out perks before doing more work even though Marchionne is bound to score points with the staff by rewarded staff for hard work rather than working on "bottom line profitability".
Earnings forecasted in 2011
Chrysler expects to generate net earnings ranging anywhere from $200 million to $500 million on revenues of $55 billion in 2011. That would be quite an improvement over 2010’s $652 million net loss, caused largely by what the automaker believes are unforgiving interest rates on its TARP loans. Lower volume, increased advertising and higher automobile launch costs were also factors within the net loss for the year.
It’s believed that the financial pie was "modified" a bit with the fourth quarter earnings. This was done specifically for a reason. A recorded "profit" for instance this meant the business could report good news. It was the first quarter since bankruptcy that profit was recorded.
Articles cited
Auto News
autonews.com/apps/pbcs.dll/article?AID=/20110131/OEM/110139998/1250
Detroit Free Press
freep.com/article/20110131/BUSINESS0103/110131007/1049/SPORTS01/Chrysler-narrows-4Q-net-loss-posts-operating-profit?odyssey=nav%7Chead
TARP committee warnings to Chrysler about bonuses
youtube.com/watch?v=DM-Zm7YNTvg
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