If we start enacting some big punishment of the executives they will all just leave. Good luck finding another with any ability for a "welfare" price.
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Big Three Autos
- Thread starter Unite Our Nation
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If we start enacting some big punishment of the executives they will all just leave. Good luck finding another with any ability for a "welfare" price.
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Rhodri
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not following what you're saying.
That was not really directed towards you, I just quoted the most recent, sorry. It was geared towards the idea that we are supposed to seize the assets of CEO's of these companies that are struggling.
Many of the CEO's there now had nothing to do with the collapse. Also, if you set up a precedent of seizing all of a CEO's assets every time a company has a hard time you will never find a qualified CEO to take over the company. Any sniff of an economic slowdown and CEO's will be bailing left and right on companies.
Andy
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Not with you here. No one is going to work as CEO if you do this. If their stocks are taken from them, no one would want to do the job. IF no one does the job, it's a guarantee the company will fail.
AIG really didn't waste much. The problem with AIG was the new accounting rule imposed by government called Mark-to-Market. AIG did nothing wrong.
Fannie Mae and Freddie Mac I'm with you on. Those government appointed pin-heads ran the company into the ground while fudging the numbers so as to collect executive bonuses. They should be jailed. Why there isn't more outrage over them, than Enron, is beyond me, since they did the same thing, only worse than Enron.
Andy
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Supply and Demand. Good executives are very hard to find. When you have hundreds of companies across the country, and most offer golden parachutes, if you don't offer the same, you'll end up getting a really crappy excutive which can cost the company dearly.
Ultimately, the share holders are the ones who determine how much an executive is worth.
Mike Jeffries of Abercrombie & Fitch, was given a massive contract for taking over as CEO of A&F. Yet he turned a falling, nearly bankrupt company purchased for a mere $45 Million in 1992, to a company that recorded $800 Million in sales by 1998.
Was the incredible wages and "built in rewards for senior execs regardless of performance" worth it? Clearly yes.
pocketfullofshells
Well-Known Member
you can punish the people who failed, and still pay those who you bring in who can actuly do the job.
Rhodri
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I disagree. Reward him for his success not for his failure. This is how any other employee is motivated.
Unite Our Nation
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Andy, it was a "fly off the handle" post. No thought put into it. In reality you are correct.
Who on Earth would take a job like that? No one who is very well qualified. No CEO in the world would ever take any risks if this was the system, and it would cause our companies to compete even less.
Rhodri
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What's "it"?
Andy
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Mike Jeffries likely would never have taken the position if there had not been the benefits and built in reward that were there. You can disagree, but then if you had been the investor, your investment wouldn't have not a turned a 250% return.
Try and think of it this way: If you are a peon at a company, are you going to take a manager position if there is not an increase in pay relative to the responsibility of that position, regardless of your specific performance? Answer for most all people is, of course not. Why should I take a position of responsibility if I'm not going to get paid for it?
Similarly, CEOs will not do the job if there isn't a corresponding pay and benefits relative to the responsibility of the job. Being CEO is similar to be POTUS. Every time something goes wrong, they blame the CEO. Every time an employee screws up, they blame the CEO. When investors have a problem, they don't talk to board members, they talk to the CEO. When the company loses money, they talk to the CEO. When an employee dumps a bag of trash on the side of the road, and the media sees it, who do they talk to? The CEO. When a guy in accounting makes a mistake that the SEC finds, they don't go to the head of accounting, they go to the CEO.
The CEO is a lighting rod for every problem or issue the entire company faces. Are you going to do that job, if your pay is reduced to very little for performance? Will a good CEO, who knows what he's doing, work for peanuts until his performance justifies a higher rate? The answer is no.
Again, supply and demand. Corporations have no choice but to offer terms and conditions of employment that will attract the best of those willing to be CEO.
Andy
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Job Interview Pocket style:
Welcome to Acme inc! So your are applying for manager? Good! We need manager! The terms of your contract are as follows: Your starting pay will be about 25¢/hour over those you are managing. Of course this is just an introductory rate until you make some decisions that show you are competent.
However if any of your choices end up not working, then we will beat you, tar and feather you, parade you on the news as being an idiot, and dismiss you out right, while stripping all your earned income. Further, since you'll be manager, everything that goes wrong, regardless of wether it's your fault or not, will be blamed on you with similar results as above.
Sign at the bottom to accept your contract.
____________________________________________________
Here at Acme Inc, we want only the best!
Everyone knowledgeable on the matter knows that the only cure for a recession is increased consumer spending ... and everyone with at least half a brain knows that for consumers to increase spending they need to obtain sufficient disposable cash.
Now the federal government wants to bail out the big three by diverting a few billion, who knows how much, of the bankers' bailout money to these auto companies.
But, though I applaud robbing from the rich bankers to give to the ... rich auto CEOs? ... I can't help but wonder about the sanity of the thinking that says if we prop these three up for awhile, then they will sell more cars and eventually be on their own without need for bailout help.
Isn't it obvious that once the bailout money runs out for them that they'll be in the same dire straights they were in prior to their bailout if consumers aren't buying their cars?
I would think so.
With that in mind, and considering recessions are cured by consumer spending, why not simply divert those few billion dollars in bailout money directly to consumers so consumers can buy the cars?!
The government can divide the billions of dollars by the likely cost of a big-three vehicle, conduct a lottery for the resulting total of vehicles determined by that math, drawing Americans' social security numbers out of a hat, and the winners get a free trip to the big-three dealer of their choice to buy a new car and the government foots the bill.
Consumers will get to spend, and they'll get to spend with what amounts to a greatly needed tax rebate.
The big three will stay in business, sell cars, and thus keep their employees employed.
Everybody wins ...
... Everybody, that is, except big three CEOs, who, as an understandable qualifying requirement must relinquish their golden parachutes and much of their unjustified obscenely high salary.
This same concept can be used to bailout anything, including banks. I mean, why give billions to banks so they can just buy other banks?! Simply conduct a lottery of home owners/buyers and give them three years worth of mortgage payments while we ride this out. It's just another tax rebate, banks thereby can't misuse the money, and, of course, qualifying mortgage companies must do that CEO remuneration reduction thing presented in the previous paragraph.
If the government is going to do bailouts, these bailouts make sense, don't you think?
Yes, they do.
And that's because it's always consumer spending that cures recession.
Of course, usually increased consumer spending to cure recession is precipitated by a drop in prices that followed reduced production and mass unemployment, etc. ...
... But why wait for nature to take its excruciatingly painful course when a good quick fix can solve the problem?!
But what happens after the bailout money runs out?
Well, then we can have our full-blown recession as originally planned, albeit sans as much needed government first-aid as we had prior to fiddling around with bailouts.
But in the meantime, considering avoidance and procrastination is our national economic pastime these days, let's goof around a bit first as usual before plunging into that expected recession the Money System had planned for us.
Ah yes, the Money System -- don't you just love the Money System?
I'm sure the bankers and automakers do, considering the current bailout mentality in Washington.
But the scores of millions of un- and under- employed individual human being Americans who have dropped off the radar and can barely feed their children? Not so much.
Now the federal government wants to bail out the big three by diverting a few billion, who knows how much, of the bankers' bailout money to these auto companies.
But, though I applaud robbing from the rich bankers to give to the ... rich auto CEOs? ... I can't help but wonder about the sanity of the thinking that says if we prop these three up for awhile, then they will sell more cars and eventually be on their own without need for bailout help.
Isn't it obvious that once the bailout money runs out for them that they'll be in the same dire straights they were in prior to their bailout if consumers aren't buying their cars?
I would think so.
With that in mind, and considering recessions are cured by consumer spending, why not simply divert those few billion dollars in bailout money directly to consumers so consumers can buy the cars?!
The government can divide the billions of dollars by the likely cost of a big-three vehicle, conduct a lottery for the resulting total of vehicles determined by that math, drawing Americans' social security numbers out of a hat, and the winners get a free trip to the big-three dealer of their choice to buy a new car and the government foots the bill.
Consumers will get to spend, and they'll get to spend with what amounts to a greatly needed tax rebate.
The big three will stay in business, sell cars, and thus keep their employees employed.
Everybody wins ...
... Everybody, that is, except big three CEOs, who, as an understandable qualifying requirement must relinquish their golden parachutes and much of their unjustified obscenely high salary.
This same concept can be used to bailout anything, including banks. I mean, why give billions to banks so they can just buy other banks?! Simply conduct a lottery of home owners/buyers and give them three years worth of mortgage payments while we ride this out. It's just another tax rebate, banks thereby can't misuse the money, and, of course, qualifying mortgage companies must do that CEO remuneration reduction thing presented in the previous paragraph.
If the government is going to do bailouts, these bailouts make sense, don't you think?
Yes, they do.
And that's because it's always consumer spending that cures recession.
Of course, usually increased consumer spending to cure recession is precipitated by a drop in prices that followed reduced production and mass unemployment, etc. ...
... But why wait for nature to take its excruciatingly painful course when a good quick fix can solve the problem?!
But what happens after the bailout money runs out?
Well, then we can have our full-blown recession as originally planned, albeit sans as much needed government first-aid as we had prior to fiddling around with bailouts.
But in the meantime, considering avoidance and procrastination is our national economic pastime these days, let's goof around a bit first as usual before plunging into that expected recession the Money System had planned for us.
Ah yes, the Money System -- don't you just love the Money System?
I'm sure the bankers and automakers do, considering the current bailout mentality in Washington.
But the scores of millions of un- and under- employed individual human being Americans who have dropped off the radar and can barely feed their children? Not so much.
Andy
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This will lead to full blown socialism, and tyranny. At the moment the government props up the big three with subsidized auto purchases, then the government will have invested interest in keeping it going. This is because the public will see that when government stopped supporting them, they all lost their jobs, and the economy went into recession instantly.
Everyone will blame whoever is in power. That person will not allow that to happen. Instead, they will continue the bailout Indefinitely to prevent voter backlash.
Better solution is no socialism. No bail out. Let them fail.
Everyone will blame whoever is in power. That person will not allow that to happen. Instead, they will continue the bailout Indefinitely to prevent voter backlash.
Better solution is no socialism. No bail out. Let them fail.
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Lagboltz
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I heard a the radio an interview with Ron Gettelfinger, pres of UAW.
He was asked what's wrong with bankruptcy, you will still have jobs during the reorganization.
Ron replied who would buy a car from a bankrupt company? Ron implies he wants the auto companies to survive. If that's the case the UAW should start compromising.
He was asked, isn't wrong product mix one cause of the failure, and won't that happen long term?
Ron said low sales are not from wrong products. It's the economy's fault. That is deep thinking.
My observation is that executive management should want bankruptcy as a means to save the company because they can then void union contracts. Hourly worker excessive benefits and layoff compensation could be avoided. Also during reorganization the UAW would loose the power to strike. Striking a company in bankruptcy would take down the whole company and their own jobs.
Of course bankruptcy would also cause management to jeopardize their own benefits, and that may be a strong reason they would rather have bailout.
He was asked what's wrong with bankruptcy, you will still have jobs during the reorganization.
Ron replied who would buy a car from a bankrupt company? Ron implies he wants the auto companies to survive. If that's the case the UAW should start compromising.
He was asked, isn't wrong product mix one cause of the failure, and won't that happen long term?
Ron said low sales are not from wrong products. It's the economy's fault. That is deep thinking.
My observation is that executive management should want bankruptcy as a means to save the company because they can then void union contracts. Hourly worker excessive benefits and layoff compensation could be avoided. Also during reorganization the UAW would loose the power to strike. Striking a company in bankruptcy would take down the whole company and their own jobs.
Of course bankruptcy would also cause management to jeopardize their own benefits, and that may be a strong reason they would rather have bailout.
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