It may be becoming a lot clearer to both Fiat CEO Sergio Marchionne and the US taxpayer exactly how Chrysler wound up turning into a black hole for cash. You don't have to go far from the top to get a taste of the conventional wisdom that helped turned the auto maker into the crown jewel of the Cerberus collection. Chrysler's deputy CEO, James Press, is learning the hard way that living bonus check to bonus check has its potential pitfalls when your business model of making cars worthy of their own zip codes and writing loans to anybody demonstrating the ability to walk upright proves unwise.
Faced with the unfamiliar reality of life without a 7-figure bonus last year, Press is now being sued by Western Federal Credit Union in Michigan after missing two loan payments totaling around $200k. When not dodging calls from credit unions, he is likely trying to come up with a game plan to address the near $1 million lien the IRS has placed on his house in light of some missing tax payments. But help may be on the way for this member of the Chrysler elite who apparently sees either a recovery in the auto industry or the resumption of non-performance based bonuses.
"Due to the turmoil in the automobile industry and uncertainty surrounding our ownership, my request for bonus payment was denied," Mr. Press said, after informing the Western Federal Credit Union that he would be unable to make two pending loan payments for $203,000, according to the lawsuit, portions of which were posted by The Detroit News on its Web page. "I am attempting to arrange for a loan against my future bonus with my employer, which would allow me to pay this loan off."