Chrysler CEO Sergio Marchionne informed employees both salaried and hourly that a performance bonus is on the way, writes Automotive News. After releasing 16 new or renovated cars last year, Marchionne decided that employees on the industrial side of Chrysler needed to be praised. Bonuses could be delivered on Feb. 11, according to Chrysler spokesman Mike Palese.
Whether by the hour or salary, Chrysler staff will get a bonus check
Each of Chrysler’s 22,000 United States and 7,600 Canadian by the hour staff with receive $750 in recognition for their achievements, said Palese. There are 10,000 within the U.S. and 750 Canadian salaried staff that will get a number not revealed by Palese.
Even though the company posted a net loss of $652 million this year while the fourth quarter had revised operating revenue of $198 million, Chrysler will nevertheless pay the bonuses. In the Chrysler modified operating profit, interest on loans wasn't included. This included interest the government got on the Troubled Asset Relief Program loans.
May not be lucrative
Sergio Marchionne is proud of what the industrial side of Chrysler has been able to accomplish.
"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 vehicles 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 bonuses before doing more work even though Marchionne is bound to score points with the staff by rewarded staff for hard work instead of working on "bottom line profitability".
How 2011 profits may look
In 2011, with revenues of $55 billion, Chrysler expects to get revenue between $200 million and $500 million. The unforgiving rate on TARP loan is what the automaker is blaming the $652 million net loss in 2010 on. There were higher vehicle launch costs and increased advertising that did not help much. The lower volume was also an issue.
Experts believe the fourth quarter earnings change was "modifying" the financial pie. A recorded "profit" such as this meant the company 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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