UAW wants executive pay to be limited
The president of the United Auto Workers union, Ron Gettelfinger, said in a recent CNN interview that U.S. automakers need to tell Congress they will limit corporate pay, bonuses and severance packages in return for more government loans. Gettelfinger also said that the Detroit Three only need the loans to hold them over during these tough times. While the first statement from the union's top player seems like basic common sense, the second seems highly optimistic... especially when one considers the size of the industry and the depth of its issues. While no single event (or loan, for that matter) will likely turn around the downslide, all of those affected by the auto industry's potential demise will be interested in tomorrow's events. That's because Dec. 2 is the day House and Senate leaders told the automakers that they need to submit a "credible restructuring plan" that's convincing enough to get Congress to open its wallet when it reconvenes next week.
[Source: Reuters]
Reader Comments (Page 1 of 4)
Mike 12:40PM (12/01/2008)
anyone else see a problem with the workers trying to tell their bosses how much they can make?
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rndmnme 12:46PM (12/01/2008)
Yes.
Comrade Gettlefinger needs a paycut.
AZZO45b 1:15PM (12/01/2008)
Gettelfinger's pay as leader of the UAW is nowhere near the top auto executives... not even F*ckin' CLOSE.
Based on compensation I recall for high ranking middle managers at Chrysler & GM... the UAW president might rank BEHIND them.
The UAW has made concessions & have agreed to MORE... if they are giving something... top management responsible for steering the car into the ditch should give as well.
Executive compensation has been out of control for WAY too long. Top guys should make more if they are doing a good job... the current Big 3 are not even close to doing this...
In the 70's top execs made about 45 times what the blue collar forces did... that's increased to 250-400 times more before our latest economic headaches (depending on what figures you consult).
2004m3driver 1:18PM (12/01/2008)
Yeah, If the bosses are doing bad they should just get out of business. Thats how my business is ran. If I mess up then, well, the business is gone and I am in debt.
Those "comrades" are actually being nice.
Jimbo 1:43PM (12/01/2008)
I never thought I'd say this, but I agree with Gettlefinger on this one. The highest paid person in the company shouldn't make more than 6x the median salary. That way money is reinvested in the company to make it healthier and the resentment between management and the workers is reduced. There is absolutely no reason for execs to make such outrageous salaries.
Flashpoint 1:52PM (12/01/2008)
I love how when CORPORATE FRAUD IS OBVIOUS...those who wish to stop it are accussed of :
#1 being communists
#2 "destroying the 'free market' economy"
#3 being marxists
#4 being socialists
#5 not understanding how the global market works
These people are S T E A L I N G.
There is no way in hell a corporate CEO should be making 300X the federal minimum poverty level - ESPECIALLY if the company is failing. And then to top off their years of theft...they get a PARACHUTE MADE OF CASH????
In the good old days, people like this were executed.
Mike 2:01PM (12/01/2008)
Any CEO should make exactly what the board of directors sees fit. The board has an obligation to get the best CEO they can afford. If they weren't worth it they won't get it for long.
Jimbo 2:13PM (12/01/2008)
Mike, it's not about getting the best CEO they can afford. The board of directors is a "good ol' boys" club. Many of the directors are CEOs of other companies, companies that would benefit by having the "right" CEO. So they pay them generously for their support. And besides, if the board were to lowball a CEO's salary, what precedent would it set for their own companies to do the same?
And other posters here are right, that the salaries and benefits made by these execs are a pittance compared to the other problems in the company. But the symbolism of cutting executive salaries would go a long way towards showing that they are serious about saving the company.
Mike 2:40PM (12/01/2008)
Ahhh, so it comes down to symbolism over substance.
happy_penguin 3:00PM (12/01/2008)
The workers should have their pay and benefits brought in line with the Japanese... oh wait, that already happened. What's taking the board so long to get the CEOs pay in line with the same $903,000/yr salary that Hiroshi Okuda of Toyota makes?
Jimbo 5:34PM (12/01/2008)
Symbolism leads to substance. When execs take a drastic pay cut, it shows the market that they have confidence in the company that they are leading and are willing to make personal sacrifices to ensure its survival. That in turn makes the public and investors feel better about sticking their money into that company. Cutting the executive salaries might only save these companies
Aki 12:40PM (12/01/2008)
While we're talking cuts, would UAW/Gettelfinger admit that the union pension/benefits need to be cut down (which is by far the largest drain on the Big 2.5)?
You could give CEOs $0 dollars in pay, it doesn't change the billions lost from union benefits. It's amazing how stubborn and near-sided the UAW is. They're bringing down US automakers, and doing so with an arrogant stride.
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f650 8:19AM (12/02/2008)
This is exactly the right answer. Paying a CEO $50M/year is NOTHING compared to the strain of the legacy workers.
Frank 12:41PM (12/01/2008)
should limit the UAW's pay too.
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Jake 12:43PM (12/01/2008)
What would do more to help the big-3: reducing executive pay or reducing UAW pay to be more in line with what GM's competitors pay their labor?
Capitalism means that failure is an option, even for GM, and that is a good thing. Let them fail and restructure. Maybe they can work out a better deal with their labor if they do. Perhaps even deals comparable to what their competitors get in their American assembly plants.
More debt, government influence and regulation is not what is needed. This is what created the problem and more of it won't solve the problem, but will give these corrupt politicians in DC more air-time.
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IK 12:47PM (12/01/2008)
if GM goes bankrupt, would that increase or decrease the aggregate prices of foreign cars? (ceteris parabus)
situation one: more people buying foreign cars -> increased demand -> inflated prices
situation two: more people buying foreign cars -> more production -> more dealers -> more supply of cars on the market -> deflated prices + more support and parts + cheaper support and parts
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jgp 12:50PM (12/01/2008)
The UAW also wants their members to refer to the UAW as "our thing".
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adam 12:50PM (12/01/2008)
yeah how much does he make? we should limit his pay... and we should limit oil CEO's pay... and we should limit WalMart CEO's pay...
I hate when they talk about government having a say so in how much someone does or doesn’t get paid. if you don’t like the way they run their business then let them fail. if the CEO's pay was what is keeping them from succeeding then they deserve to fail. but we all know that’s not it... its just a marketing ploy like this whole we are selling our jets thing... it makes no difference.
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mike 12:50PM (12/01/2008)
Interesting article Michael, but you forgot to mention a very important part, EXECUTIVE COMPENSATION
You forgot to give us numbers
Wagoner makes 17+ Million Dollars a year
Mullaly makes 21+ Million Dollars a year + unlimited use of jet to commute to Seattle, where he lives and travels once a week (52 weeks * 30K per trip)=???
His wife and his children also have unrestricted use of the Jet. Same fot Mark Fields, he lives in Florida and travels every weekend.
As I said Mullaly DOES NOT live in Detroit, so one has to ask where does he live? What is the rent? Who pays for the rent? What about Food?
Wagoner is just a criminal, as simple as that.
The Executive compensation is just a number, but it goes way, way beyond that.
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Chuck 12:54PM (12/01/2008)
In Soviet Russia, pay limits you!