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Report: Chrysler, GM Offer Employee Buyouts, Vouchers

UPDATED WITH GM BUYOUT OFFER:

Troubled automaker Chrysler -- probably in the worst shape of the Big Three, though it's impossible to know because it's a privately held company -- is offering a new round of buyouts to employees with a twist, Automotive News is reporting.

According to a Chrysler memo sent to the United Auto Workers and leaked to Automotive News, Chrysler workers will be offered $50,000 to walk away from their jobs, plus a $25,000 voucher toward the purchase of (wait for it) a new Chrysler vehicle.

If the worker turns down retiree health care benefits, they'll get $75,000 in cash. But they'll still have to take the Chrysler.

Chrysler has 38,000 UAW workers.

This afternoon, General Motors offered its UAW workers the same deal to walk away: $50,000 in cash and a $25,000 voucher toward purchase of a new GM vehicle.

On the one hand, it's kind of a brilliant move: Chrysler and GM lower their payrolls and up sales at the same time.

On the other hand, from an outbought employee's point of view, they're out of a job. And, if you're a Chrysler worker, they own a vehicle made by a company that has considered bankruptcy and may end up merging with GM or Ford before this is all over.

We imagine the following Chrysler employee, negotiating his buyout: "Can I just have the cash, instead? No? Then do you have any vouchers for Toyotas? Hyundais? How about a John Deere tractor? At least I could resell that."

What will a $25,000 voucher get you in the Chrysler line?

The only Chryslers that come in under $25,000 are:

- The PT Cruiser, MSRP: $18,470. But it's being discontinued, so good luck getting parts and service.

- The Sebring: $23,380.

If you want a Chrysler 300 ($27,415), an Aspen hybrid ($46,120) or any other vehicle from the Chrysler line, you'll have to make up the difference yourself. Also -- did we mention this? -- you're out of a job.

Your $25,000 voucher goes a little further if you're allowed to chose from the Dodge line.

You could buy an Avenger sedan ($21,255), a little Caliber ($16,840), a Journey crossover ($21,300) or even a base-level Challenger ($22,545, no muscle). If you want a Dodge truck, you're in better shape -- the Dakota and Ram start under $25,000.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  February 2, 2009; 2:47 PM ET
Categories:  The Ticker  | Tags: Chrysler, Ford, GM  
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Comments

So it is not ok to give bonuses but some how is not enough to give buyouts with taxpayer money.

Posted by: reddy531 | February 2, 2009 5:38 PM | Report abuse

The comments to this entry are closed.

 
 
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