Wow, GM Execs' salaries halved...

[Deja Q]

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-02-07T205959Z_01_BAU748398_RTRIDST_0_BUSINESSPRO-AUTOS-GM-DC.XML

By Jui Chakravorty

DETROIT (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) halved its dividend on Tuesday, the first cut in more than 13 years, and slashed executive pay, responding to demands from billionaire investor Kirk Kerkorian, in a move widely seen as a bid to gain union support for further concessions in 2007.

The board of directors -- which had been under pressure to make the moves from Kerkorian, GM's largest single shareholder -- cut the dividend to an annual rate of $1 a share, reducing its payout by $565 million a year.

Of course, with offshoring and everything, how much of a real loss will it be for the execs? They are the ones who make the decisions regarding profitability and therefore must be the first to take the hit. Why drag the workers, what's left of them, in at all? All they do is make the products. Unless they're not doing a good enough job, of course...

[Cobalt Violet]

1. I hope this becomes a trend.

And that the trend continues.

[Selatius]

3. You're pissing in the wind, I'm afraid

Many, but not all, of the big shareholders in fortune 500 companies give a rat's ass about the well-being of the average worker beyond how much money they can help bring into their pockets. They are shareholders and have invested their money in the company for one reason and one reason only: Make money.

If they already have their piece of the cake, then the company can go under, and they get to walk away with a big check anyway. If it weren't for Kerkorian's efforts applying pressure on other board members, they probably wouldn't have bothered cutting back the dividend at all, and if they did, it probably would've been a fraction of that amount.

[Selatius]

2. I bet that 565 million a year would've helped GM a lot if...

they decided to cut the dividend and put that amount into R&D for a better product line-up, more fuel-efficient cars LONG BEFORE they had to lay off 30,000 workers because the company was performing so poorly.

[Kierkegaard]

4. That'll go over big with the 'haves.'

Ya know, if they would have spent half of their annual advertising money over the last 10 or so years on R&D instead of trying to trick people into believing they had a better product, what you said.

I've been listening to the 'big 3' lying their asses off about their crappy products for a decade. Ass biting time...

[corporate_mike]

5. why advertise poor products anyway? -- test drives will reveal all

[Kierkegaard]

6. Advertising sells people who don't know any better...

at least initially. Once bitten, twice shy and all that.

[gizmo1979]

10. I've owned GM products for the last 15

years.What is supposedly wrong with them?I've found the only people that complain about GM quality are those that have not driven one lately.It'll cost you lots less to fix if something should go wrong then their foreign counter parts.

[Kierkegaard]

16. That's a fallacy.

Half the parts on American cars are from foreign sources, and lots of sub-assemblies are as well. Not to mention that many 'foreign' cars are made here using many American made parts. There isn't any remarkable difference between repair costs, unless you figure in how seldom your 'foreign' car needs repair.

Incidentally, I've owned more than 30 cars in the last 15 years, and a number of them were 'American' made. They don't compare to the best of their competition. Look it up in J.D. Power.

On edit: no disrespect intended. I'm glad you are happy with your vehicle.

[gizmo1979]

17. You had better look up the

jd powers ratings again brother.And you obviously don't know squat about repair bills Take your foreign piece of shit in and get it fixed and see what it costs.By the way my American made car is ranked number 3 in owner satisfaction what is your?You guys who blast American made cars make me want to throw up.When all the jobs have left and you're working at wal-mart with the rest of us the light will go on.However;by then it's too late.

[Selatius]

8. The problem with GM is over-excessive emphasis on profits

The result is they go for short-term goals that bring in lots of money. What brought in lots of money in the 1990s? Big-ass gas-guzzling SUVs driven by people who hardly ever use it for industrial/commercial purposes except for leisure. From what I read, they were very big revenue generators if not the biggest during the booming 1990s.

The oil shock of recent years hits. Barrels of oil 60 or 70 dollars a piece. What's the result? The workers were made to pay the price for shareholder greed by being told to get lost because GM didn't invest as much in fuel-efficient sedans and hybrids that could sell. Some of those workers spent decades working for the company, and it all turned to crap in the end.

I knew there was a problem with selling that many SUVs long before the oil shocks. They apparently saw nothing wrong with the strategy, which tells me one of two things: 1) They were making money, knew the risks, and didn't bother addressing those risks at the time because it would've involved spending their money, or 2) they were that damn incompetent not to see the problem of going big into SUVs and rendering sedans and fuel-efficient vehicles as 2nd tier priorities.

I'm no genius, but I would think you normally don't become lord and master of a fortune 500 corporation by being an incompetent moron.

[Kierkegaard]

15. You're right about Fortune 500 companies in general.

Their momma's likely didn't raise no fools.

I think FoMoCo lends credence to choice <1> of your theory with a move they made back in the late 70's. If you remember, they hired number crunchers to determine whether paying out settlements for wrongful death suits would be more financially beneficial to the company than correcting a deadly design flaw. Anything for a buck...

I'll stick by my assessment of their PR spending, though. Many years of over-advertising an inferior product has a HUGE slope of diminishing returns. I didn't count, but I know Chevy ran at least 2 ads during the Super Bowl. That's a nice chunk of change to drop on one day's adverts, and doesn't count development costs.

I guess at the end of the day, bad management is just that...

[Deja Q]

7. Don't get all 1950s on me...

Back in 1950, R&D was where the money went.

My, have times changed...

You're definitely right that with proper research, we all wouldn't be in the mess today.

With luck... With luck, there are solutions that will spare us the coming crash. There's always a way. And with our population, I don't see why it can't be found - collectively.

[gizmo1979]

9. I'll believe it when I see it.

[SoCalDem]

11. How will that poor family survive on 2.3 mil a year & stock option?

http://www.autoblog.com/2005/11/29/gm-ceo-secures-fat-pension/

GM CEO secures fat pension
Posted Nov 29th 2005 2:00PM by Eric Bryant


So, let me get this straight - one of the major problems with the Big 3 is excessive worker benefits, right? So, if that's the case, then one would expect executives to practice what they preach. And at about this time, you're wondering if I'm really from this planet, and for good reason. GM CEO Rick Wagoner will be receiving a $4.6M retirement package, courtesy of a Supplemental Executive Retirement Plan that has been set up for him. This plan comes from funding that is separate from GM's vastly underfunded pension plan, and is said to be payable even if GM files for bankruptcy. Is it just not possible to properly fund one's own retirement on $4.8 million a year? Or is the goal to just eliminate whatever sympathy that the public might still have for GM's management? Wow.

[Catchawave]

12. ...and the BONUS would be....????

I'm guessing a few million each in off shore banks????

edit for spelling dammit

[0rganism]

13. Still about 4 orders of magnitude greater than an auto worker

I think they'll still be able to afford the yacht.

[LSK]

14. its about time