Vince Snowbarger, interim director of the Pension Benefit Guaranty Corporation (PBGC), said in a statement that both Daimler Chrysler and Cerberus consulted with PBGC officials during the negotiations leading up to the $7.4 billion deal announced Monday in which Cerebrus will acquire Chrysler’s North American auto operations (See Chrysler to Keep Pension, Health Liabilities).
Also as part of the deal,$18 billion to $19 billion of retirement and health-care liabilities will be folded into a new Chrysler holding company, Chrysler Holding LLC.
“Both Daimler and Cerberus have made significant financial commitments to strengthen Chrysler pensions,” Snowbarger said in the statement. “Daimler has agreed to provide a guarantee of $1 billion to be paid into the Chrysler plans if the plans terminate within five years. Under its new ownership capitalized by Cerberus, Chrysler will make $200 million in pension contributions over the next five years above and beyond the legally required minimum.”
Snowbarger declared: “I commend both Daimler and Cerberus on their willingness to work with the PBGC to protect the retirement security of Chrysler workers and retirees.”