Comments

Now, that really puts things into perspective, although I must admit to wondering initially why the remembrance. (Perhaps I was really annoyed by the story and was disgusted to read it. I couldn't read fast enough.) Is the suggestion to get rid of these executives and to overhaul executive pay across the board? Whose responsibility is this? Various boards? Can the government insist upon some things since we are providing the loan? After reading the ending I understood well the need for the story. What a brilliant national security team and what a wonderful leader I believe the President-elect will be.

President-elect Obama seems to understand well that he himself will not bring change alone. He also seems to have his ego in check and love of country foremost. The selection of these very strong and capable leaders in their own right says a lot about the leadership ability of the President-elect. He is not seeking yes men and women but strong leaders in their own right to move our country forward. When I look at the team I am particularly proud that the US can produce such a capable, strong, and diverse team. Did I say that I was proud to be an American? Awesome!

Posted by Judith Ellis at December 1, 2008 2:37 PM

One of the problems with executive pay is everybody in on everybody elses board. It sets up a quid pro quo arrangement.

An idea I saw this morning is any business that accepts government help\bail-out has to cap executive compensation with that of the President for the next ten years. Not that it will happen, but it would be a great clause.

Posted by Greg at December 1, 2008 3:04 PM

They couldn't make this stuff up ... and there was us thinking we in Britain had the monopoly on the class system. Clearly it's alive and flourishing well over there across the pond. If it wasn't so disgusting it would be funny.

Posted by Trevor Gay at December 1, 2008 3:04 PM

"... has to cap executive compensation with that of the President for the next ten years." (Nice. Thanks, Greg.)

Posted by tom peters at December 1, 2008 3:25 PM

Holy crap, Tom.

Care for some hyperbole, anyone? What is it with everyone wanting to bash the Big 3?

The book you quote, from Ms. Keller, WAS PUBLISHED IN 1989!!! (my caps) Don't you think it's somewhat irresponsible to bring this up as if it is happening today or in the recent past?!?

I no longer work for GM, but did starting in 1995...and I never remember Chevrolet HQ being in Kansas City...hell, I don't ever remember Chevrolet being it's own separate division. But I guess it's acceptable to dig up old antecdotes to paint with a broad brush.

I usually the work of Mr. Peters but enough is enough on this subject. For a more thoughtful and insightful take on the Big 3 read the autoextremeist blog. Candid, harsh, and factual.

I'm getting so tired of the media and others convieniently blasting the Big 3 for a $25 Billion bridge loan while ignoring that we've given Wall Street factorial amounts more than this with no end in sight.

Blast the Big 3 if you must as they've made plenty of mistakes, but at least be fair in your critiques. Don't dig up stories that are decades old. If that were the case, most of us would still probably feel differently about the governments of Japan, Germany, and Italy. That too, obviously, would be unfair.

Posted by Kevin K. at December 1, 2008 3:47 PM

I remember being called into the controller's office a month after starting my new job at GM. He wanted to talk to me about being over budget for payroll. All of my employees were management members on a fixed salary, so I couldn't quite understand the problem. The problem was that management at GM got paid overtime!!! My folks were making time and a half and double time on the weekends...Not on par with the orange juice story but goes a little way in understanding the entitlement culture there. I loved my team, but quite frankly the wages they could make with their credentials outside of GM would easily be at least a third less.

Posted by mike Neiss at December 1, 2008 3:52 PM

Haven't got UK figures but substitute "UK bank bosses" for "autoworld's Big Three CEOs" and your service pay comparison works here as well.

Also, and this applies to your military equally, nobody is trying to kill you at work.

Posted by Stuart Jones at December 1, 2008 4:00 PM

In the first post, referred to here, from 1120.08, I said the book was published in 1989, qnd given the behavior two weeks ago they (the top, at any rate) haven't learned one f%^&ing thing.

I surely admit with unfettered delight that car quality is much better--but market share has gone steadily down. And it's not price--they are losing money due to high costs in part, but their prices are competitive.

Posted by tom peters at December 1, 2008 5:04 PM

The title of the earlier post was "Naught for Twenty Years."

I think it is pure tradgedy. And more or less pure management culpability.

Posted by tom peters at December 1, 2008 5:08 PM

We have spoken here about high legacy costs and more competitive salaries. If I'm not mistaken, future 2009 contracts will affect both of these. Regarding arrogance and entitlement, I do not think these things can be dealt with without a strong hand. But whose hand might this be? Greg has made the board dilemma clear.

Posted by Judith Ellis at December 1, 2008 5:14 PM

What I have difficulty understanding is that since a large chunk of these gentlemen's pay checks is bonus and performance pay, how do they rate this given the dismal performance of their companies over the last few years?

To be fair, this current crisis is not of their making, and the people who did create the crisis got exponentially BIGGER bailouts with little or no strings attached. Also to be fair, although Mr. Mulally's pay and venality are both way off the scale, at least Ford has been moving in the right direction in terms of downsizing, quality and safety (#1 in the recent safety ratings), which is more than can be said for Chrysler.

Let's remember that if the big three go under the main losers will not be the fat cats that are in everyone's cross hairs, but the blue collar workers at the companies and at the suppliers, and the communities of ordinary working folks that they support. While the workers are very well paid for what they do, an adjustment in pay and benefits to match the workers at the American and Canadian Honda, Toyota, Nissan et al plants would be more appropriate. And although fat cats blame the high labor costs for their troubles, labor costs have gone from about 20% of the value of the average car to about 7% over the last several years.

Since the big three have major presences in countries around the world, it would be ideal if any bailout was coordinated and shared among the governments of the countries affected (for GM this includes Opel in Germany, Holden in Australia, Saab in Sweden, Vauxhall in Britain, etc.), although given that this would take forever to arrange it might be wishful thinking.

Posted by Bob W. at December 1, 2008 5:20 PM

"While autoworld's Big Three CEOs took home about $40 million in compensation for their individually and collectively disastrous performance in 2007, the combined pay for the Big Four Generals responsible for our global security (military heads of the Army, Navy, Air Force, and Marine Corps) was about $1 million!"

And Tiger Woods raked in $115 million for his skill at swatting a dimpled white ball into a little hole in the ground. Either the insanity of laissez-faire capitalism and what people place value on makes long-term sense, or it doesn't? Which is it? If it doesn't, who do we delegate as the "sense maker?" And if it does, then let the Big 3 deal with the big hole that they've dug for themselves. Their problem is not a short-term credit problem nor is it a "perception" problem as they'd like to have everyone believe: http://tinyurl.com/5slkzb

Posted by Tom Asacker at December 1, 2008 6:47 PM

"Out of Whack"

Posted by Patrick at December 2, 2008 3:11 AM

"Tiger Woods raked in $115 million for his skill at swatting a dimpled white ball into a little hole in the ground."

A soldier in the imperial Roman Army could earn about 1000 sesterces PA (mind you the head of the military could earn an empire if so inclined!). In a single chariot race at the Circus Maximus the winner could win around 50,000. Calpurnianus (something of a Tiger Woods of the chariot racing world) won over a million in his career (that prize money was only a part of his total earnings)

Nothing changes - apart from the fact that Tiger Woods doesn't run the risk of being dragged to a painful death in a golfing accident.....

Posted by PaulH at December 2, 2008 4:30 AM

Tom A - hope you are well my friend. I love the ‘perception’ thread in your comment and your excellent post on your Blog. Perception is surely all we have. (Who was it who said "Don't let the facts get in the way of a good story"). I also love your challenge to us about this capitalism/socialism thing. If capitalism is 'manna' from heaven why does it suddenly become ok to allow the government to bail out the painfully obvious failure of free markets (actually it becomes more than ok – it becomes life saving). Feels to me like government are portrayed as ‘interfering busy bodies’ that should just leave the markets to ‘experts’ who can regulate themselves while the sun shines and government should just keep their noses out …Until of course greed takes over and the free market ‘experts’ cry out for help from the government and we, the taxpayers, come to the rescue. I’ve no doubt the anti government thinking will soon be to the fore again once the bail out has stabilised things a bit and we begin to see the green shoots of recovery. Then of course, government will once again be described as those out of touch folks who don't really understand markets and are nothing but ‘interfering busy bodies’ and this whole circular and yet polarised thinking (excuse the geometrical impossibility of those words) just keeps perpetually going round. Oh for some collaboration and middle ground thinking. Mr Obama, with his cross party appointments, is I believe showing the way and how I wish we had such collaboration in UK politics instead of the endless bickering of extremes that helps no one. Phew that feels better – at least the sun is shining today, Tuesday, in Shakespeare’s County, Warwickshire, England …. the most wonderful place in the world right now on a crisp cold winter morning …. .and life is still good.

brand viagra echeck Posted by Trevor Gay at December 2, 2008 6:02 AM

PaulH - Thank you. Thank you. Your historical example points us to human nature. What now will point us beyond it? There is more than me and what I see in others and hope to be. We allow such things often because we ourselves on some level desire them. Perhaps more thoughtful leadership and individual actions will point the way to what we expect of each other collectively.

Posted by Judith Ellis at December 2, 2008 7:34 AM

Tom's point about the hubris of the Big 3 execs may be dated, but the same behavior by execs across many companies is timeless. Remind yourselves of Dennis Kozlowski's recent excesses at Tyco. CEO's in the mold of Harold Geneen continue to come and go. What is it that causes some to lose complete touch with the "real" world and get caught up in salary, perks, ego, options, status, etc? In real hard times, why do such few corporate leaders rise to the occasion, like Lee Iaccoca at Chrysler or Mike Walsh at Union Pacific? Who are today's role models?

Posted by Bruce at December 2, 2008 9:45 AM

Bruce - without hesitation I nominate this man brought to us on this Blog by Jim Winter on 21 November as follows:

"I saw a great piece on CNN today where the CEO of JAL (Japanese Airlines) was doing it hard. He dumped all perks and cut his pay below that of his pilots. He takes the bus to work, eats with his employees, etc. The auto execs don't get it. They have no clue. They have an overinflated sense of their importance. And they lack integrity."

Amen Jim! and thanks again for giving us hope.

Posted by Trevor Gay at December 2, 2008 10:08 AM

Hope is all around, in the smallest and grandest of gestures. While we look at leaders of big companies for leadership, perhaps we should change our focus to those around us. Who is making a difference? Pehaps we should demand of ourselves that we begin hope anew within us and make the necessary changes. I am determined more and more to do exactly this.

Posted by Judith Ellis at December 2, 2008 10:22 AM

I just stayed/worked at a (there seem to be two, one by Marriott and the other by Hilton) Muehlenbach Hotel in Kansas City in October. I know exactly where these people had to stand...LOL!
I can't imagine needing a job so badly it compromises my dignity, the dignity of a company and then enabling such cataclysmic narcissism.

Posted by nextgenradio at December 2, 2008 12:49 PM

Great post, Tom. Even if that was the culture back in the 1980s, their private jet flight to the White House was a sign that they are not getting the optics of their behaviour.
Surely, there are other people with the right skills ready to become CEO?
From the unions to the CEO, everyone's at the trough.

Posted by Jacoline Loewen at December 2, 2008 12:57 PM

I wonder how the compensation packages at the Japanese and Korean car makers stack up.

The impression I get is that the perks serve to insulate the top execs from reality. Seem to have worked pretty well.

I would love to have Warren Buffet weigh in on this. He seems light years ahead of most.

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