Chrysler CEO Bob Nardelli revealed today in bankruptcy court that Lee Iaccoca's pension would be among the obligations Chrysler will no longer have to pay once it emerges from bankruptcy as "New Chrysler."
The former Chrysler CEO's pension fund is an unsecured claim, which in a normal bankruptcy would be paid after secured claims. But Chrysler's bankruptcy is anything but ordinary, with the UAW retiree funds taking top priority and secured claim holders likely to see very little of money.
In addition to losing a large portion of his pension fund, Iaccoca will also lose his lifelong guaranteed company car as part of Chrysler's bankruptcy. Chrysler has written to other former executives as well, announcing that it will stop its vehicle program and will not reinstate it under "New Chrysler."
Chrysler said it regretted the action "in light of the many contributions these individuals have made to Chrysler over the years."
Iacocca, who worked at Ford from 1946 to 1978, led Chrysler from 1979 to 1992. Iacocca was largely credited with leading Chrysler out of near bankruptcy in 1979, and presided over the introduction of the minivan and the acquisition of AMC (and thus the Jeep brand). In the '80s, Iacocca appeared in a famous series of commercials for Chrysler's vehicles with the phrase, "If you can find a better car, buy it."