Executives at Chrysler Financial are just plain greedy. So just why did we bail them out? It's okay for the taxpayers to pony up money but they won't accept pay cuts. That's the exact reason these government bailouts are a joke. We're putting the taxpayer at risk and those who ran the company into the ground don't want to shoulder any.
But Chrysler Financial's maneuvers aren't so unique. General Motors (GM) finance arm, GMAC, was given a free pass to convert to a bank holding company. So did American Express (AXP). But those conversions were done before the pay cap rules were passed so they didn't need to rein in corporate excess.
And that's just fine. Chrysler Financial was looking for another handout, though. $750 million worth, and their execs didn't want a pay cut. Seems to me they're not so bad off if the bosses don't think they need to reduce their pay to save the company. And if they're not so bad off then they shouldn't get the money. Nor should they have gotten the TARP money to begin with.
So they've lined up private financing they say and can make do without the government's assistance. That's as it should be. But it also points out just how greedy these people really are and why they should have been allowed to fail if it came to that. Greed will ultimately sink Chrysler Financial.
I have no financial position in any of the companies mentioned in this article.
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