The Washington Post is reporting that Chrysler Financial turned down a federal government loan because of concerns about the limits on executive compensation that would come with the financing. Here’s the story:
Top officials at Chrysler Financial turned away a $750 million government loan because executives didn’t want to abide by new federal limits on pay, sources familiar with the matter say.
The government had been offering the loan earlier this month as part of its efforts to prop up the ailing auto industry, including Chrysler, which is racing to avoid bankruptcy. Chrysler Financial is a vital lender to Chrysler dealerships and customers.
In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company.
Chrysler Financial denied in a statement that its executives had refused to accept new limits on their pay.
