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

[preciousjeni]

AGDee, thanks for posting! I'm really impressed with what they're doing.

[epchick]

Yeah a lot of that was in the link I posted.

And again they seem to be making all these good ideas, but it's all about cutting funds from their employees. Yeah they'll sell their jets but what about their salaries? So they get paid $1 for the next year, they still have millions. How about giving some of their money back to companies.

[KSig RC]

Originally Posted by preciousjeni

AGDee, thanks for posting! I'm really impressed with what they're doing.

I can appreciate what they're doing and definitely think it's a step in the right direction, but two things bother me:

1 - Much of this appears to be post hoc (especially after the PR backlash), which makes me wonder if the mentality of crowds is overriding the 'correct' decisions

2 - If this bailout were such a great idea/investment for the US Government, why aren't banks lining up to offer it?

Originally Posted by epchick

Yeah they'll sell their jets but what about their salaries? So they get paid $1 for the next year, they still have millions. How about giving some of their money back to companies.

This seems really . . . severe. Regardless of how poorly the guys did their jobs (and there's plenty of evidence they sucked), they earned the money, and that sort of "refund" from the past is a rounding error in the grand scheme of things. This really should be about moving forward, and if the companies are profitable, then the CEOs can justify their salaries again (most of whom had been successful elsewhere prior). The CEO salary issue is a talking point for the public, but it's simply a minor factor in the grand scheme of things.

[AGDee]

I got really ticked off when Congress was asking the questions about whether these guys would be willing to work for $1 and why they flew their corporate jets there. Our national debt is escalating at record levels and our Congress aren't working for $1 a year nor or they giving up any of their perks. It's not like the auto makers CEOs are making what the CEOs in the oil industry are making, yet they are similar in size, per the Fortune 500 article I quoted earlier in this thread. The difference? We HAVE to pay $4 for a gallon of gas because we have to get to work. If cars doubled in price, nobody would buy one, they would do whatever they could to get their current one running.
http://www.msnbc.msn.com/id/12519975/

Chevron's CEO received $37 million in total compensation last year. Conoco Phillips' CEO got $17 million. Those are big numbers, but experts say they are in line with Wall Street's inflated standards.

Then there's Exxon's CEO and his stunning $400 million pay and retirement package — which an industry spokesman still defends.


http://www.leftlanenews.com/gm-chief...ll-salary.html

GM has raised the salary of its Chief Executive, Rick Wagoner, ending his self-imposed pay-cut dating back to 2006. As previously reported, Bill Ford is fighting a similar move from the management over at Ford. Wagoner’s salary has been raised back to $2.2 million, a 33 percent increase, for 2008, which is the same it was back in 2005, the year before Wagoner’s salary cut went into effect, GM said Thursday.

The 55-year-old executive cut his base salary by 50 percent in 2006, then made a smaller, 25 percent cut in 2007 after GM posted a $10 billion loss in an attempt to help the company in its turnaround efforts, according to The Detroit News. In 2006, Wagoner’s base salary amounted to $1.3 million. Since then, he has managed to save GM $9 billion, negotiate a money-saving deal with the UAW and oversee a product revival.

Earlier, someone was asking why the foreign auto companies aren't in trouble if much of this is due to the credit market freezing up and the numbers tell the story. Their numbers are down also:

http://online.wsj.com/article/SB1228...googlenews_wsj

U.S. auto makers continued to post sharp sales declines in November as General Motors Corp. reported a 41% plunge and lowered its fourth-quarter production forecast, underscoring why the struggling auto maker and its Detroit rivals are seeking federal assistance to help them through the current environment.

"Every manufacturer is posting awful numbers and we are no exception," said GM North American sales chief Mark LaNeve.

The dour numbers, coming on the back of October's moribund results, also saw Ford Motor Co. post a 31% decline and Toyota Motor Corp. report a 34% decrease. Chrysler LLC, a private company controlled by private-equity group Cerberus Capital Management LP, saw its sales skid 47%.

I like this Time article, personally, about the corporate planes. http://www.time.com/time/business/ar...3640-1,00.html

And this one, about the effect of a GM bankruptcy on the economy. http://www.time.com/time/business/ar...862737,00.html

[awkward1]

Thanks AGDEE! Those links were very useful and did give me a new perspective on the issue of the use of corporate jets. One thing that I believe was not addressed in the article is that every person should always strive to not only obey the rules, but to avoid the appearance of impropriety. So, while there may have been good reason for the execs. to take those jets to D.C., it just looked bad and that overshadows the whole episode. It's just a matter of looking at the big picture, will my actions reflect my actual intentions or will my actions make me appear to be less than forthright. If the CEO's couldn't see that flying to D.C. to ask for a bailout in private jets could reflect poorly on them, it makes me question their judgment on all other matters. And as stated earlier, most of these moves that they are now willing to make are in reaction to the outrage from their first visit to D.C. It was at the first hearings where only one CEO said that he would be willing to work for a dollar if he received a bailout, the other two stated that they would not. In fact, one CEO stated that he was quite comfortable where he was at and that he would not be willing to work for a dollar. So my question becomes: Are these the people that can lead the Big 3 to be profitable again, can they think outside of the box? I think that their cheese has been moved and they have no idea how to find it.

Who Moved My Cheese

[PeppyGPhiB]

Originally Posted by awkward1

Thanks AGDEE! Those links were very useful and did give me a new perspective on the issue of the use of corporate jets. One thing that I believe was not addressed in the article is that every person should always strive to not only obey the rules, but to avoid the appearance of impropriety. So, while there may have been good reason for the execs. to take those jets to D.C., it just looked bad and that overshadows the whole episode. It's just a matter of looking at the big picture, will my actions reflect my actual intentions or will my actions make me appear to be less than forthright. If the CEO's couldn't see that flying to D.C. to ask for a bailout in private jets could reflect poorly on them, it makes me question their judgment on all other matters. And as stated earlier, most of these moves that they are now willing to make are in reaction to the outrage from their first visit to D.C. It was at the first hearings where only one CEO said that he would be willing to work for a dollar if he received a bailout, the other two stated that they would not. In fact, one CEO stated that he was quite comfortable where he was at and that he would not be willing to work for a dollar. So my question becomes: Are these the people that can lead the Big 3 to be profitable again, can they think outside of the box? I think that their cheese has been moved and they have no idea how to find it.

Who Moved My Cheese

My thoughts exactly!

[madmax]

Originally Posted by AGDee

I got really ticked off when Congress was asking the questions about whether these guys would be willing to work for $1 and why they flew their corporate jets there. Our national debt is escalating at record levels and our Congress aren't working for $1 a year nor or they giving up any of their perks. It's not like the auto makers CEOs are making what the CEOs in the oil industry are making, yet they are similar in size, per the Fortune 500 article I quoted earlier in this thread. The difference? ]

The difference is the oil companies actually make money vs the auto manufacturers that make less than a kid with lemonade stand.

Originally Posted by AGDee

I like this Time article, personally, about the corporate planes. http://www.time.com/time/business/ar...3640-1,00.html
]

The article on corporate jets is weak. The main defense is everyone else does it too. The article left out the fact that Mulally's wife has the use of a jet at her disgression. When Bear Sterns was going down the toilet, Bear's CEO Jimmy Cayne hopped the company jet to a bridge tournament in Detroit. When he got word that the company was losing billions he waited a couple of extra days in Detroit because the private jet was not available and he didn't want to fly commercial.

[awkward1]

I heard a small bit of the UAW representatives testimony today and I must say he did change my mind a bit about the auto unions role in this. I used to think that the union was responsible for limiting the profitability of the auto company's. After listening to the hearings today I changed my mind and I am now more centrist in my feelings towards the union and here is why: When a corporation is having monetary difficulties one of the easiest solutions is to cut employee benefits. It's so easy to cut out the pension, decrease the employers contribution to health care, and eliminate jobs. It is much harder to think outside the box and come up with innovative restructuring and oust the the entrenched group think. After listening to todays hearing I found myself glad that these employees and retirees had an advocate which is in essence forcing the big 3 to get a little more innovative in their thinking. I think that all employees enter into a type of unwritten fiduciary contract with the employer when they are hired. The employee agrees to do a good job in exchange for an agreed upon set of benefits and a well managed business. If the workers fail to do a good job they are fired. When a company is systematically mismanaged, guess what? The line workers and retiree's start to loose their benefits and or jobs. I look to a company like Apple for an example on how to run a company well. Apple integrated the entire process of producing a product so that all departments were involved or have knowledge of what is going on. Designers, engineers, accountants or whatever do not work independently in different departments moving a product from the research dept. to the design dept. to the development dept. My understanding is that at the time this was an innovative approach to management that resulted in ground breaking product designs. This is what I would like to see from the auto execs...don't tell me you need to cut benefits etc. Tell me how different you are going to be from what you are now, how is management going to be radically different? How many layers of management can you eliminate? How many departments can you consolidate? Can your engineers work hand in hand with artists? If you can do this, and you still need more financial cuts, as a last resort pursue benefits.

*stepping off the soapbox now*

[b_estes19]

In reading this, I wonder how ignorant people can be.

The car industry has always been been placid along with the Unions about how many hours they work and what they get paid.

Now, the jobs bank comes out where people got paid to not work. Oh, 85 % of their wages?

So, I just wonder whom is at fault.

[awkward1]

Originally Posted by b_estes19

In reading this, I wonder how ignorant people can be.

The car industry has always been been placid along with the Unions about how many hours they work and what they get paid.

Now, the jobs bank comes out where people got paid to not work. Oh, 85 % of their wages?

So, I just wonder whom is at fault.

Are you referencing my post or this thread in general or the politicians? Who?

[MysticCat]

Originally Posted by b_estes19

In reading this, I wonder how ignorant people can be.

The car industry has always been been placid along with the Unions about how many hours they work and what they get paid.

Now, the jobs bank comes out where people got paid to not work. Oh, 85 % of their wages?

So, I just wonder whom is at fault.

In reading this, I wonder why Tom Earp keeps coming back to Greek Chat.

[preciousjeni]

Originally Posted by awkward1

How many layers of management can you eliminate? How many departments can you consolidate? Can your engineers work hand in hand with artists?

Isn't that job loss though?