Photo Source: blog.cleveland.com
According to CNNMoney.com:
-Begin-
The company announced that the salary of Ford CEO Alan Mulally would be cut to $1 a year if Ford (Fortune 500) actually borrowed money from the government. When Mulally appeared before the House Financial
Services Committee last month, he did not agree to the suggestion of such a paycut.
A spokesman for General Motors (GM, Fortune 500) confirmed to CNN that CEO Rick Wagoner also will accept a $1 salary. Other details of GM’s turnaround plan were not immediately available. Chrysler LLC CEO
Robert Nardelli agreed during Congressional testimony last month he would also agree to a $1 salary in return for federal help.
Mulally had a base salary of $2 million and total compensation of $21.7 million last year, according to the company’s filings. Wagoner received base pay of $1.6 million and total compensation of $14.4 million. Closely-held Chrysler does not disclose executive pay.
Ford and GM also announced plans to get rid of corporate jets. Mulally, Wagoner and Nardelli were all roundly criticized at a House hearing last month when they admitted they had each flown their corporate jets to Washington to ask for help.Ford said it will sell its five corporate jets. GM said it plans to sell four of its seven jets and is exploring plans to transfer leases on the other three to another operator. Chrysler spokesman Ed Garsten says Chrysler does not own any private aircraft but instead leases them on an as needed basis.
Mulally and Wagoner will be driving to Washington in hybrid vehicles made by their companies when they return to Capitol Hill later this week to make their case for loans. Nardelli is also not planning to fly to Washington but Chrysler has not disclosed any more specifics of his travel plans.
Executives from the Big Three automakers have been seeking $25 billion in federal loans as a result of the economic crisis and tumbling auto sales. Tuesday is the deadline for the Big Three automakers to present
their turnaround plans to Congress.
GM and Chrysler have argued that they could run out of cash next year if they don’t get a bailout from the government. But Ford repeated its previous statement that it believes it can return to profitability without help from Congress and that it is seeking the assistance more as a backstop.
-End-
I’ll take a $1 salary, but only if I’ve been making millions all along like the other CEOs.
More Reading: Ford unveils turnaround plan
1 comment so far ↓
Thanks for the post.
I am against the bailout as presented to the taxpayers.
There is room for a painful bankruptcy by one of the Big 3. But because the room is not so large, I’d suggest Chrysler should disappear.
Yes, sometimes deep, necessary changes / transition are very painful (unemployment, social impact…which should be temporary as explained further below).
I think one needs to consider things beyond the bail-out to avoid big controversy.
The first thing that needs to be considered beyond the bailout is the long term effect of it, or in other words the long term changes implied by the bailout.
One should only consider the bailout if it helps change the long term prospect of the beneficiary. Otherwise, it remains and will be another one of the many patches necessary to “fix” chronic mismanagement.
Yes, I want and I’m not afraid of chaos in the short term if it leads to stability and peace in the long run. I am sure you’ve read a few good books or essays about Chaos Theory.
Let’s think of chaos as a necessary transition towards deep, long term changes. The car making business model has not changed in a century: same old extremely complex vertical integration. Think about it and you’ll realize it has served well one group’s purpose: shareholders (until it all goes bad recently), in order to control the market and cut cost with too much pressure on suppliers.
I want Chrysler to go to hell if in the end it promotes the emergence of new cars (think Tesla and beyond), new smaller brands with simpler, flexible operational integration that encourages creation, innovation, cooperation… (think open source) with multi-level integration. => I want Honda’s new hybrid engine on my Austin Mini Cooper, period (please nobody argues, we send robots to Mars!). That’s the model the computer market enjoys.
I do not trust those 3 heavy weights will welcome such revolution in the car making industry because their greedy shareholders want easy, constant dividend and they are too busy developing exotic financial products nobody understands, rather than pushing the revolution. Therefore, I do not trust they will make good use of the bailout.
Instead of bailing out the Big 3 to save temporarily jobs and social stability in the short run, the government may help GM, carefully though, and bail-out new car projects (green…) which will both create the jobs that were lost and make the government a strong sponsor of innovation and a more ethical, stable shareholder. Yes, it is possible, think of EDF which I hope the French gov will never completely sell.
The bailout would then be received much better by the public because it would be seen as a real long term investment, not an expense, with long term benefits (income, environment…).
If it benefits the government, it’s good to taxpayers. And green energy is the next big revolution so we should capitalize on it before China and a new generation of shareholders take over.
Full capitalism is wrong and so is full socialism. An elaborated blend of both is THE solution.
Leave a Comment