I have a question about a possible temp solution for the car industry.

[napi21]

It's Dec. Holiday time, AND BONUS & DIVIDEND TIME too. Since all the CEO's have already conceded to working for $1.00 next year, whould they be able to retain enough cash to survive until January if they eliminated ALL Christmas bonuses, all dividends, and the salaries of anyone in the company making $1 million or more a year?

The AH Pubs in the Senate are being their own stubborn AH selves and seem determined to fillabuster the bridge loan vote. Since this loan was a temp. bridge until the new Congress & new Prez. take office, do you think it might be possible to twist the arms of the auto guys by pushing the, to adopt my suggestion above?

[spindrifter]

1. I don't think that adds up to enough.

[sandyj999]

2. If they gave up the jobs bank it would make a difference.

There is a lot of money involved in that and the companies are paying it. I don't understand this because the reason many times the employees aren't working is that too many vehicles have been produced. Then the company has to come up with 85-95% of the employees pay? I would hate to think how much money is being paid out. Someone correct me if I am wrong.

[napi21]

3. What is the jobs bank? n/t

[sandyj999]

6. This is what I know.

Right now my son in law is laid off from Ford at least until sometime in January while they change over from producing SUV's to small cars. He has been home for over a month already. I know that this has happened very often to him and he is always paid at least 85% of his regular pay. My understanding is that this was one of the union demands and a worker can be paid for up to two years. The company pays this, not the union. If they could get rid of this I would think it would help the company a lot as there are a lot of employees off now and a lot of money being paid out. Most people that are laid off have to try to make it with unemployment and I believe this would be a huge money saver.

[napi21]

7. You may want to read the info at this link, and send it to your SIL.

http://www.autoblog.com/2008/12/01/uaw-considers-dropping-job-bank-for-idled-workers/

I never knew they had this benefit, and I admit, it's a really great thing, but I think you're right. When the co. they work for is on the verge of evaporating, it's probably a good concession.

[sandyj999]

8. Thanks for the link. Very interesting.

As for the SIL he is so deeply union indoctrinated he thinks he is entitled. I just read in the paper this morning how it works . This is from the Detroit Free Press 12/12/2008. I quote a part of it.

"When UAW workers are laid off they receive a combination of unemployment benefits and supplemental pay from their employer for 48 weeks. If they remain laid off beyond that time they move to the "jobs bank", where the company pays about 95% of their pay and benefits."

There are workers moaning they are getting the pay based on 40 hours. In my opinion many of them have over-extended themselves due to overtime pay. I learned a long time ago you can't depend on that and anyone that purchases anything on credit based on that is a fool.

There is talk this morning that Getelfinger is going to have a press conference so maybe they are going to offer up the jobs bank as a sacrifice. I feel it would be a good first step.

[napi21]

5. I don't know. I heard this bridge loan was to hold them over till

March. If that was moved back to January, that should reduce what they say they need by at least 1/3, maybe more.

Many years ago, I worked for a $50 million/yr corp that paid .02 per share in dividends, and the total of the dividend check run was over $20,000. That tells me the cash dividend at GM could be pretty large!

I guess we'll see, but it was a thought.

[Cessna Invesco Palin]

4. No.

You're talking about at a maximum hundreds of millions of dollars (and that's an extremely pessimistic estimate) vs. billions needed for GM to survive. That's why I find so much of the uproar over exec compensation and bonuses to be silly. It really is a drop in the bucket.

[Grimm]

9. Pretty much this

For example, if you look at Ford's 2008 shareholder proxy (http://www.ford.com/doc/2008_proxy.pdf) and their 2007 annual report (http://www.ford.com/doc/2007_ar.pdf), you can get a decent guesstimate of how much executives and VPs are paid.

More specifically, according to page 10 of the AR, there are a total of 38 executive officers and VPs (16 execs and 22 other VPs specifically). According to Page 55 of the proxy, the compensation, including both cash and stock bonuses, for the CEO, CFO and top paid 3 other execs were in 2007:

CEO: $21.6 million
CFO: $11.7 million
VP1: $8.39 million
VP2: $10.26 million
VP3: $8.67 million

If we assume the other 33 executives make as much as the lowest of the group (highly improbable), then we've got:

34 X 8.39 = 285.26
21.6 + 11.7 + 285.26 + 10.26 + 8.67 = $337.49 million

Basically, if we cut out all of Ford's executive salaries, they'd save less than $350 million and that's assuming all executives are paid over $8 million. So, like the above poster said, it's a drop in the bucket.

And for the sake of being controversial and a devil's advocate, Ford estimates their 2008 pension payments to retirees is going to be about $3.9 billion. That isn't so much a drop in the bucket.