DaimlerChrysler AG, Stuttgart, is protecting its German pension plans with Dodge Vipers, Mercedes-Benzes and Chrysler minivans. Well, sort of.
The automaker is using €295 million ($392.6 million) worth of company cars as collateral to bolster its German pension scheme, according to the company's annual report. Its German pension plans had total assets of about €9 billion as of Dec. 31, at which time those plans were underfunded by €3.6 billion.
The filing said DaimlerChrysler pledged the cars in 2004 as a result of a new requirement to provide collateral for some vested employee benefits. Under a German law for "part-time work prior to retirement," employers must secure debts to their workers to protect "against the risk of insolvency," said Thomas Frohlich, DaimlerChrysler spokesman. He said the law, which took effect last July 1, only applies to part-time work contracts signed on or after that date.
Mr. Frohlich said posting the cars as collateral had no effect on financial statements.
DaimlerChrysler had total pension assets of €27.8 billion as of Dec. 31, at which time the plans were underfunded by €6.6 billion.