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Big Three Bailout - Seriously, $1?
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Posted by
marylou
12/02/08 11:19:23 PST
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This morning, Ford CEO Alan Mullaly said he would cut his salary to $1 a year if his company takes any government loan money.
I'd love to know exactly how he'll do that and still get health benefits. Because as far as I know, most companies have to pay at least minimum wage for a full-time employee to receive benefits. And full-time minimum wage is about $14 an hour. But I suppose it's a good step toward doing the right thing for your company.
Take a look at this story, though. I think it's amazing that a CEO like this exists, anywhere in the world.
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12/04/08 15:01pm PST katieg
That CNN story is incredible. Kind of like the Jet Blue CEO, Neeleman, who took a salary of $1 after the great Passengers Rights Manifesto after all those people were trapped on the runway. In that case though, what's so amazing is that a CEO who works for free can still manage to be forced out! -
12/04/08 08:21am PST RebelMom
Anne_H_S, the first thought that popped in my mind was a big OH! Now I get it. I mean, I understand what you're saying now. Thank you for clarifying it and I am sorry if you thought I was offended. I really appreciate you telling me your story ... more than you'll ever know. I think what sticks in my mind is that the media (and people ... even in my own extended family) are blaming the automakers for the economy woes and no one is saying boo to the Wall Street bankers. I think I just rankle whenever that happens. My husband is like you and yours ... he's all for the bankruptcy, wherease I am more focused on the blame game. It is very petty of me, but I think it is my way of trying to control a situation that is spiraling out of control very fast. He's going to be laid off either next week or the following week and who knows if he'll have a job by the first of the year. My dad was laid off during the Reagan years so I do know what it was like to see him struggle and seeing him struggling again is not easy. I have never made much money until I married my husband ... we have been trying to keep afloat until the kids were in school full time so I can go back to work ... and that plan isn't working. I can work now but jobs have dried up. It will be easier to work at places like Walmart or McDonalds if my husband's laid off permanently because then the kids will be taken care of (he'll be home). It's not in our plans but hey, life doesn't always work out the way you want it to. I also feel your frustration of seeing half of everything you've worked for disappearing. I have friends who just shrug their shoulders and say, well, at least it's not the house that we've lost. I can't understand that mindset because everything you've worked for is disappearing and that cannot be replaced. We bought our house when it was at the lowest fixed interest rate possible five and half years ago. Then while inflation increased, my husband's wages did not. To add that up, there's the medical expenses (which, in spite of the really good insurance, the insurance does not cover ... no matter what insurance you have, if you have a preexisting condition like a hearing loss, it is not covered ...surgery is covered, but not hearing aids, batteries, and these things do add up). We probably spend more on hotels, gas just to get to the doctors that are in the big cities, not locally and co-pays. Oh yeah, we're only allowed $125 for general care visits a year (for the coughs or flu) and with twins, it's gone within the first appointment. So all that adds up. My husband was trying to figure out how he can stay afloat and I reminded him of medical bills and doctors and you name it. There were other unexpected expenses that came along ... and like I said, once the kids entered first grade, I was going to find a job. Why didn't I do this sooner? I did ... but my paycheck was measly that afterschool care ate it up. There is more but I am starting to ramble ... so please forgive me if I am whining. I really appreciate your thoughts. Thank you for listening to me! -
12/04/08 08:10am PST westtexas8
HI Anne, Here in Texas, when Enron imploded the workers lost their pensions, their insurance, and all of their 401k's. Only a law suit by a labor union got the workers at least part of their benefits. Lay and company may have served time or lost money( and isn't it sad that his(lay's ) family only got to keep one house) , but not on the level of the adverage worker, who lost everything. The Bankruptcy court did not address the workers losses. Bankruptcy may help the corporation but these companies can restructure w/o operating under a court order and that would be to the benefit of the rank and file if the past is any indicator. I disagree about R&D.. in the Silicon Valley a company is running hard at producing vehicles that are green and can compete with Japan; Japan introduced a vehicle that runs off hydrogen in Calif. R&D can save those jobs and those companies,IMO. The companies are indeed going to have retool and rethink, I believe that Congress has made it clear that a plan must be in place that is viable. As far as my tax dollar goes, if the Financial institutions are going to get paid off for bad decisions and not save jobs or contribute the economy in a meaningful fashion, pretty clear that has not happened to date,then I want my tax dollars to support American workers and American jobs that actually pay a living wage and provide pensions and benefits. It is the moral choice for me . Anyone in the market has lost money, my husband and I included. We will work an extra 10 years,in our business or for someone else. There is no other way. The money is gone. We are helping our youngest finish her undergrad degree. Such is life. If supplier contracts need to be renegociated then so be it. I worked for many years for a Fortune 500 , one of my duites in one office was to coordinate with vendors- my company had a 30 day clause that allowed for cancellation of contracts at will. This is standard. Is it the fact that the Big 3, all very large companies, did not use a standard supplier contract? If the standard was used those contracts can be renegociated after 30 days. No court is necessary to do that. You are right, we do all want the same thing, and we do all have opinions on how to get there. I hope we can take the best of the ideas, put them together, and emerge with a plan that will put the country on track . I don't mind working unitl I am 75 or so but I never planned on working until I was 85. As I said, such is life. BUT, I sure don't mind a little justice for the fatcats while I am working... LOL. a dollar a year salary seems fine to me. So does flying coach. -
12/04/08 05:28am PST Anne_H_S
I am sorry that you lost sleep Rebel. I want to make sure I say this the right way because I sometimes have a tendency to put my foot in it! As I said in my post, my husband's point about the bailout is to SAVE GM, Ford and Chrysler in the long run, although in the short run it will cost on a personal level. His position, after working for almost 20 years consulting to the auto industry, is that if they are bailed out and the management continues in their current vein they will go out of business all together. Unfortunately this isn't a knee jerk "blame the unions" reaction. This is a studied position developed over years of seeing badly negotiated contracts with all kinds of suppliers in which the Big 3 is paying 2 to 3x what any other business is paying for the same exact stuff. Other businesses have taken advantage of them big time. The revenue stream on energy efficient vehicles does not support the current cost structure. We can do all the R&D in the world, but that doesn't solve this basic problem. For the record, I don't expect anyone to pay for my kids educations. I have saved money in a 401K plans since my early twenties. We started 529 plans for both of our kids at birth and put the maximum amount in allowed by law. We live in a house we can afford with a mortgage we would have qualified for in the days when the neighborhood bank owned your mortgage for the whole 30 years of your loan. In the last few months we have seen half of what we have worked so hard to build disappear and it seems to have happened because of bad loans to unfortunate people who were told that they didn't have to save for down payments on their homes. That doesn't seem fair. I also know the pain of being laid off - I lost my job during the dotcom bust and my dad lost his job while he was putting me through college. Losing your livelihood is awful and I wouldn't wish it on anyone. But I also would not wish an entire industry disappearing on our country as a whole. The point about bankruptcy was that it IS something the companies can emerge from and stay in business. Many people, my husband included, believe that this will happen eventually. We would rather see them preparing now and able to emerge than forced to liquidate . But I'm no expert. I think we probably all feel the same way about this: you save, you work hard and you try to do the right thing. We may not agree on how to get there, but I know we are trying to get to the same place. I'm sorry that this is taking a personal toll on you. You deserve healthcare for your son - everyone does. There are lots of people out there that don't have it and I wish they all did. Thanks for listening. -
12/03/08 05:40am PST westtexas8
You are welcome,Rebel. We are in agreement. Union jobs got a bad rap under Reagan, (whom I detest as much as one can w/o knowing someone) when in truth Unions with all of their faults are the reason many of us have decent lives. I think Amercians are just afraid. We have allowed business to run the country with no checks and balances; look where we are. Many have no insurance or are underinsured. Wages have not kept up with the cost of living. The global economy has created a shift in jobs- many are overseas where workers are exploited but we are paying less for goods- and isn't that nice as those wages have not risen. It is clear to me that business must have some sort of regulation. The trick will be to keep government in check also- those checks and balances- and not stifle business. it is a balancing act, I feel. I just do not see why the fatcats and the admins should get help and NOT help the working guy. As for bankruptcy, that is just fraught with issues that we cannot imagine. I would rather my money be put to keeping workers OTJ and FORCE money into R&D . You are not alone.
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Mary Lou... Bailout - what a word! I'd like to take these auto exec's up in an airplane, force them, to jump, and, on the way down yell, "Bail out!" It's simple - make a good product, but, if you fail, don't foist the failure on the taxpayer.