Lee Iacocca, the car executive credited with saving Chrysler from bankruptcy in the 1980s, is to lose a big chunk of his pension and a guaranteed life-long company car due to the U.S. automaker's bankruptcy filing two decades later.

Chrysler CEO Robert Nardelli told a U.S. bankruptcy court on Thursday that Iacocca's pension would be among the obligations Chrysler will no longer have to pay if it gets bankruptcy court approval to sell itself to a New Chrysler to be owned by its union, the U.S. and Canadian governments and Fiat SpA .

Iacocca, the storied former chairman and CEO who revived Chrysler in the 1980s and appeared in car commercials, has participated in a supplemental executive retirement plan that was comprised of non-IRS qualified pension funds and is subject to bankruptcy.

The claim is unsecured, and typically would be paid after secured creditors in a bankruptcy, but even secured creditors are not expected to get full recovery in a Chrysler bankruptcy that will see hundreds of dealerships shuttered and plants closed.

Chrysler has also written to former executives saying that as a result of its April 30 bankruptcy filing it will stop a program that furnished company cars to former executives and directors.

Iacocca, famous for the phrase If you can find a better car, buy it, and other senior executives who were part of the program are being asked to return their cars to a Chrysler marshalling center or arrange to pay for them, according to the document.

Chrysler said it regretted the action in light of the many contributions these individuals have made to Chrysler over the years and that the New Chrysler does not expect to reinstate the car program.

(Additional reporting by Tom Hals and David Bailey, Editing by Ian Geoghegan.)

Chrysler