The more I hear about this automaker bailout stuff, the more ridiculous it seems. A quick look at where some of the money these companies make has went previously:
1. Ford CEO Gets $18.5M upfront, $2M salary and an immediate payout of $18.5 million for taking the job in September 2006.(Ford lost $1.4 billion in the first half of 2006.)
2. GM lifts CEO salary to $2.2 M, translating to a 33% raise (The stock has dropped 10 percent since the start of the year and about 64 percent since Wagoner became CEO in June 2000. GM reported a record loss of $39 billion for 2007, its third consecutive net loss.)
3. Chrysler’s new CEO declines to detail salary package (Chrysler lost $680 M last year.)
If a typical worker makes $30,000 per year, one Ford CEO equals 68 regular workers. One GM CEO equals 75 regular workers.
Why can’t we ever fix the problem before throwing money at it? Even people who know something about money are agreeing with me here. Even some of the auto workers themselves aren’t for bailing out these guys.
It must have been a sad private jet ride home for those CEOs when they were not granted bailout money by Capital Hill but as my coworker said, “I wish I could make $2 million for being a complete failure.”
(Thanks to Mike for some of these links!)
Amen!
Where was the bailout money when the shoe factories left Maine and went over seas?
Where was the bailout money for all the paper and pulp mills that once stunk up the air on many a river valleys in Maine?
Where was the bailout money to prop up the sardine canneries that once dotted our coast?
Where is the bailout money now to preserve Maine’s working waterfront and fisheries industry?
I guess you can see that I’m a bit angry over this. I feel sorry for all those people who will soon lose their jobs. But change happens weather you like it or not. The auto industry needs to change too!
Your argument is flawed. Worker cost to the big three is closer to $80,000 each. This is a lot more than the non unionized shops of Toyota, Honda, and the other foreign car companies building cars in the US.
A combination of silly government regulations, and very high labor costs, coupled with bean counters restricting desirable product to be built for the last forty years killed Detroit. GM’s motto has been “we are in business to make money, not cars sums it up. And, Detroit has made a lot of boring junk over the years. Gone are the yearly model changes, now stretched to six or more years. No one wanted to drive last year’s model in the fifties & sixties, why would they now. We need excitment in the show room.
Let them all go into chapter 11 bankruptcy to reorganize their business model, rewrite labor contracts, and align US government regulations with European regulations to lower costs to become competitive. And, get the damn government out of the board room, everybody’s board room for that matter. Central planning dose not work, just ask a Cuban.
The government is going to have to bail out these companies so that thousands of Americans do not lose their jobs. That’s the bottom line. No matter how much the CEOs make, the government can’t punish thousands of people because three lousy guys are dumb and greedy.
What Nancy Pelosi and her crew need to do is make strict rules on what they expect from the big 3 in return for a bailout. I think these companies need to rework their business model and take some serious pay cuts. The executives need to create a plan with attainable goals, which they haven’t yet, and be held to them with monthly or quarterly oversight by the government.
If the big 3 are going to get all this money they need to prove that they are going to use it wisely and make some much needed drastic changes. They aren’t getting any sympathy from me with their antics over the past few weeks, but it’s the guy who works on the assembly line trying to support his family that I’m worried about. It’s not his job that his bosses are complete idiots.