Auto Execs Fly Corporate Jets to D.C., Tin Cups in Hand

[prlundberg]

What is reasonable is learning from history. Fuel efficient cars should be government mandated as a condition of any bailout. It's not a question of will gas prices go up again, only a question of when. I really am a proponent of government staying out of our lives as much as is practical, especially when you see the results of such wonderful government projects as deregulating the airlines. But if they are goinig to lend these companies MY money, I want the best shot at getting it back some day!

Fuel efficient vehicle lineups are a current government mandate and much stricter ones are set to go into effect in 2020 I believe.

No more mandates are needed, especially ones that would target specific makers and hamstring their ability to offer vehicles of the same power and size as their competitors.

I think when people understand the facts it becomes clear that these companies are not nearly as stupid as people would like to believe. As I said before, Ford had it turned around earlier this year and the Japanese makers have enjoyed Japanese government subsidies for years. The executive pay people like to harp on is not any worse than what competitor execs get and doesn't have any noticable affect on the price of the cars you buy.

We as ignorant consumers have done this to ourselves.

[Uncle Cracker]

Hypothetical question - I'm not taking sides here.
But if a company is losing say $2 Billion per quarter and the CEO implements measures that stem the loss to only $1.75 B per quarter, saving $1 B per year, has he not earned a salary of $100M, a net savings to the company of $900M?

I dunno, Loring... If I, as a rank and file employee, do something to save my company $10,000 a year, should I expect them to look at giving me even half of that back in a bonus as a good financial decision? I don't think they would be so compelled... It's the same principle as you are describing, but I doubt it works that way for most. Gratitude and reward seem to rise to the top, rather than trickle down to the bottom...

[LinuxRandal]

The joke USED to be, what kind of job do you want, if your wrong half the time or better, and need to keep the job.............

Weatherman


Now, maybe, auto CEO should be added.

[radhak]

I find $10,000 in the street, return it to the owner. A fraction of that (say, $1000) as reward is both reasonable and compelling. After all, but for me, the owner may not have got any of that back!

Next, I work in the computers section. I find a process not related to me (say, mail department) that could be optimized and the company saves $1 million every year. Should they give me a fraction of that? Maybe. I have seen such rewards in a couple of places I worked at. One organization even had an ever-open offer that if the improvement was approved and successfully implemented, the originator got upt 15% of the annual savings ! Quite an incentive for everybody to look sharp!

But if as part of my job, I do things that save money, time or effort, I can't expect cash out it. Of course, in other ways, definitely - larger bonus, maybe even a newer, higher position where my skills (process enhancement, financial acumen, etc) could be better used. In other words, built-in rewards for a job well done.

Now what's the job of a CEO? To make the company viable. That's the bottomline, single-statement responsibility. If s/he does an outstanding job at it, reward her/him. But if not, it is a dereliction of duty.

Reduction in the size of the hole the company is already in, is not 'outstanding' : it's still a hole that the rest of society is paying for !.

I'd just reserve judgement, put a deadline when that hole should go away completely (say, 2 more years), and dangle the carrot of possible rewards when/if that happens.

In this case, I have heard a lot about why The3 could not function (lack of govt help, obstructionist legislations) while outsiders could. But if they can take their begging bowls and corporate jets to lobby washington now, why not before, to make it a level playing field? Because they were happy getting fat on merit-free rewards and not held accountable. Sure, CEOs lost jobs, but with those sort of handshakes, I'd look forward to being canned !

Let them wither away, and let history hold each current and past CEO responsible for the 'legacy' they leave behind. We might still see a better functioning capitalism after all this, maybe within our lifetime.

[docrowan]

I'm totally against the whole idea of bonuses and incentives for top management at a large, established corporation, particularly for the CEO. The CEO is the ultimate authority, too much incentive and it becomes extremely tempting to manipulate instead of building value or long-term vision. Witness Worldcom, Enron, etc. where the CEO and his top managers cooked the books to meet short term goals at the expense of the company. Director oversight in most of these large corporations is a joke.

Ultimately the list of candidates for CEO of a Ford, GM, IBM, or any other Fortune 500 is pretty small. These are very high profile jobs and many times a CEO will move from one corp to another after a few years. In my way of thinking a straight, albeit high, salary is the way to go. If the CEO performs well, another corporation may decide to attract him or her with an even higher salary. Bonuses and incentives for people who are selling, yes. For a manager, particularly one who oversees the accounting of the company, no.

I can see the value of a golden parachute and bonuses if your corporation is on the ropes, like the big three are now. If Ford starts shopping for a new CEO, someone who has a track record of turning around a train wreck, then you may need to offer some pretty hefty incentives to get the right man and make him want to take the job. But most of the time these incentives are offered when things are going well or reasonably well at a corporation. What's the logic in that?

[ragswl4]

Hypothetical question - I'm not taking sides here.
But if a company is losing say $2 Billion per quarter and the CEO implements measures that stem the loss to only $1.75 B per quarter, saving $1 B per year, has he not earned a salary of $100M, a net savings to the company of $900M?

Conversely, who's spending money more foolishly, the GM CEO taking a corporate jet to Washington DC for $20,000 or a underemployed union auto worker who is taking $50,000 a year in pay/benefits and doing crossword puzzles at the local union offices while on GM's payroll.

The CEO as he is also the one who ultimately authorized the contract that lets that unemployed worker get the $50K a year in pay and benefits for doing the crossword puzzles. Sure the employees and the union either struck or theathened to and the company caved in and signed the contract but who's fault is that? Surely not the employees.

[crokett]

The CEO as he is also the one who ultimately authorized the contract that lets that unemployed worker get the $50K a year in pay and benefits for doing the crossword puzzles. Sure the employees and the union either struck or theathened to and the company caved in and signed the contract but who's fault is that? Surely not the employees.

The automakers agreed to the guaranteed paycheck in return for concessions from the union to allow increased automation and production line changes in the 80s and 90s. The programs were originally set up to be job retraining, etc. Part of the problem is lack of oversight - no one is actually checking to see if the workers are being retrained. All that being said, there is still no reason for these workers to be paid to do nothing.

[ragswl4]

The automakers agreed to the guaranteed paycheck in return for concessions from the union to allow increased automation and production line changes in the 80s and 90s. The programs were originally set up to be job retraining, etc. Part of the problem is lack of oversight - no one is actually checking to see if the workers are being retrained. All that being said, there is still no reason for these workers to be paid to do nothing.

I couldn't agree more but IMHO that's not the fault of the employee. I would agree that if an employee is not productive in his/her job they should be retrained or let go. Just common sense. The automakers must be on some illegal substance for agreeing to a guaranteed paycheck for any reason.

[docrowan]

The UAW tried pattern bargaining on all the employers they were involved with in the 90's - enforcing the same demands from each manufacturer regardless of industry, history, employee needs, etc. I happen to know of one manufacturer that declined to go along, withstood the strike, and is now making near record profits even though North America is in the tank. They didn't ship the majority of their jobs overseas, and they still have a primarily US manufacturing base. They saw the handwriting on the wall and realized they couldn't remain competitive with the contract UAW was trying to foist on them. The Big 3 caved like a empty beer can and now come whining to Congress for money to help them retool? Isn't it a manufacturer's job to maintain a constant stream of new product that their customers want and to anticipate changes in the market?

Unbelievable.

[npregion2]

We forget who was there for us Americans and who was not after 911
Ford, Chrysler and GM's 9/11 Contributions



.

Ford, Chrysler and GM's contributions after 9/11







An interesting commentary...You might find this of interest:





< /pre>

'CNN Headline News did a short news listing regarding Of FORD and

GM's

contributions to the relief and recovery efforts in New York and

Washington.







The findings are as follows.....








1. Ford - $10 million to American Red Cross matching employee



contributions of the same number plus 10 Excursions to NY Fire Dept. The

company also offered ER response team services and office space to

displaced government employees.








2. GM - $10 million to American Red Cross matching employee contributions

of the same number and a fleet of vans, suv's, and trucks.








3. Daimler Chrysler - $10 million to support of the children and victims

of the Sept. 11 attack.







4. Harley Davidson motorcycles - $1 million and 30 new motorcycles to the

New York Police Dept.








5. Volkswagen -Employees and management created a Sept 11 Foundation,

funded initial with $2 million, for the assistance of the children and

victims of the WTC.








6. Hyundai - $300,000 to the American Red Cross.







7. Audi -Nothing.








8. BMW -Nothing.







9. Daewoo - Nothing.







10. Fiat -Nothing.








11. Honda - Nothing despite boasting of second best sales month ever in

August 2001







12. Isuzu - Nothing. A 0







13. Mitsubishi -Nothing.






A
0

14. Nissan -Nothing.







15. Porsche -Nothing. Press release with condolences via the Porsche

website.

=C
2





16. Subaru - Nothing.







17. Suzuki -=2 0Nothing.







18. Toyota -Nothing despite claims of high sales in July and August 2001.

Condolences posted on the website



0



Whenever the time may be for you to purchase or lease a new vehicle, keep


this information in mind. You might want to give more consideration to a

car manufactured by an American-owned and/or American based company.






Apart from Hyundai and Volkswagen, the foreign car companies contributed

nothing at all to20the citizens of the United States ...








It's OK for these companies to take money out of this country , but it is



apparently not acceptable to return some in a time of crisis. I believe we

should not forget things like this. Say thank you in a way that gets their

attention..




++++

[jackellis]

Ultimately the list of candidates for CEO of a Ford, GM, IBM, or any other Fortune 500 is pretty small. These are very high profile jobs and many times a CEO will move from one corp to another after a few years. In my way of thinking a straight, albeit high, salary is the way to go. If the CEO performs well, another corporation may decide to attract him or her with an even higher salary. Bonuses and incentives for people who are selling, yes. For a manager, particularly one who oversees the accounting of the company, no.

Executives do have some perverse incentives to cook the books, think short-term and generally forget they're working for shareholders. The people who sit on their boards of directors and are supposed to provide oversight have conflicts as well. However the pool of talent that has a necessary combination of experience and ability to run a large organization is pretty limited. So the same thing happens with these folks that happens with any other talent that's in short supply.

I agree that many corporate executives have failed to lead. On the other hand, we seem to tolerate outsized paychecks for musicians, sports figures and others who entertain but do little else to provide goods, services and jobs. I've never been able to figure out why there's been no outrage over A-Rod's $250 million contract with the Rangers, for example.

Another thing to consider is that there are some really excellent managers who toil in obscurity and still deliver. Warren Buffett, for one. Mark Hurd has done a great job putting Hewlett Packard in order. Look up Indra Nooyi sometime - apparently a very sharp woman who may be in line to take the top job at Pepsi.

There's another problem here, which is Wall Street's fixation on quarterly results. Businesses have ups and downs along with the economy. Wall Street needs to take whatever they give kids for Attention Deficit Disorder and chill a little.

[cgallery]

The Big 3 caved like a empty beer can and now come whining to Congress for money to help them retool? Isn't it a manufacturer's job to maintain a constant stream of new product that their customers want and to anticipate changes in the market?

Unbelievable.

It has actually reached the point where it requires legislation to prevent them from agreeing to terms they can't afford.

I propose that pension benefits have to be fully funded, and corporations have to rely on conservative estimates on returns in those accounts. Maybe every 5 years they can have a chance to adjust contribution rates based on returns.

No more games with this crap. Too many lives at stake.

The UAW contracts aren't too unlike the subprime housing market. The big three could only afford the benefits they agreed to if everything went "just right." A small bump in the road and the entire house of cards falls.

As it has now.

[gjat]

If you look at the history of Ford, you find the auto manufacturor generated the sense of looking out for the worker as they helped establish decent and affordable houseing for their employees to help improve the quality of their workers. In a way, the auto industry had and has a great sense of social obligation, though it has become mis-guided.

It's easy for us to say cut benefits and pay of execs and workers who aren't us.

There's enough blame and enough justification for all parties involved to have a legitimate debate. What scares the **** out of me is the Legislative Branch believes that they can figure out a solution with $25billion of money that isn't theirs.

[3thumbs]

Take a look at this, particularly the last few words.

http://info.detnews.com/video/index.cfm?id=1189

[TB Roye]

Jeff Gordon, Tony Stewart, Rusty Wallace all fly jets but they don't get called into congress. I know what Tony Stewart and Rust Wallace would tell Congress, beside being number 1

Just kidding. The US Auto Industry just doesn't get it, all of them including the UAW. The rides over. Maybe they should go into Chapter 11 and get reorganized like some of the airlines have had to do. The big three is Toyota, Nissan, Honda it is to bad but that is life, survival of the fitest. LOML drives a Ford Expedition and I drive a Toyota Tacom Dbl Cab. Both built in the USA. Guess which one has caused us the most problems and is getting ready for its second ring and pinion in the rear end at 60K miles

I think the Goose that laid the Golden egg, is cooked and will be served Thursday.

Tom