August 26, 2009
Ailing auto suppliers seek exec bonuses
Bankrupt U.S. auto parts suppliers want to pay millions of dollars in bonuses to their executives even as they lay off workers to cut costs, observers say.
The moves by such suppliers as Lear Corp. and Visteon Corp. are drawing the ire of the U.S. Justice Department as well as from U.S. automakers General Motors Co. and Ford Motor Co., The Detroit News reported Wednesday.
The newspaper said Lear is seeking to pay out $20.6 million in bonuses to 29 executives even as it is cutting costs by $350 million, Visteon wants to hand out as much as $80.1 million in bonuses and wheel producer Hayes Lemmerz International Inc. plans to pay more than $10 million in executive bonuses as it moves to cancel its retiree health and life insurance coverage for 2,200 families.
The bankrupt suppliers say the executive bonuses are critical to ensure that they can retain their value as companies.
But the News quoted U.S. trustee Diana Adams as saying,
Considering the condition of the automotive industry and the adverse effect on auto suppliers, it is unclear why payments are even needed to retain employees who may have limited options to find employment elsewhere.