Over the past two days, we've told you what we've heard about the latest short-term federal aid coming to Chrysler and GM. According to the latest reports, it will be $5B to the latter and $500M to the former. We also mentioned it had been reported that Chrysler Financial had inexplicably turned down an additional $750M in government aid during this most recent round of handouts. It had been speculated that it was because of a refusal by CF execs to sign off on executive compensation limits in the terms of the government agreement.
Although CF denied it, the fact that they appeared to be going elsewhere for additional loan money seemed to confirm that they might not have been entirely happy with the terms of the government handout. Well, The Detroit Free Press is now reporting that a recently released report by the special inspector general's office confirms that unsigned waivers were the real reason behind the rejection. The Freep is reporting that at least some of the top 25 executives at CF "refused to sign waivers releasing the Treasury Department and the company from legal responsibility for placing strict limits on executive compensation."
Even without the three-quarter-billion-dollar handout to CF, a total of $13.4B has been given to GM and Chrysler out off the $17.4B in loans President George W. Bush authorized back in December. Meanwhile, President Obama has continued to add restrictions to these handouts, rejecting the initial restructuring plans from both companies, essentially firing Rick Wagoner and telling Chrysler to make a deal with Fiat. While Chrysler has until next Wednesday to finish that deal, CF has apparently turned down the funding over the waiver issue, which had been added early this month.
[Source: Detroit Free Press]