GM’s Slough Of Despond
I hate to sound like some kind of nutcase… Who am I kidding? That doesn’t bother me at all. Nevertheless, I hate to sound like some kind of plutocrat-resenting, knee-jerk nutcase, but I risk it with this post. That is, it’s a risk if there is anyone who thinks this is reasonable:
General Motors, which has borrowed $13.4 billion from the federal government and is seeking billions more, acknowledged in its annual report on Thursday that its survival was in ‘substantial doubt.’ …
Also, the company said that the compensation of its chairman and chief executive, Rick Wagoner, was reduced to $5.5 million in 2008, 61 percent less than he earned the previous year. Mr. Wagoner has agreed to work for $1 this year.
G.M.’s president and chief operating officer, Frederick A. Henderson, received compensation worth $1.7 million in 2008, a 76 percent reduction. Mr. Henderson agreed to cut his base salary by 30 percent in 2009, to $1.3 million.”
Yes, that’s right, at the end of the year in which GM lost $30 BILLION, it’s chief executive took a large pay cut, making just a weensie $5.5 million. This year, in which it remains to be seen how many billions of taxpayer dollars the company can absorb, the chief operator will only get $1.3 million. Gee, Fred, are you gonna be alright? Should we pass that hat for that poor bastard?
It doesn’t take too many peasants to figure out that a) the guys who ran this baby into the ground are still in charge, and b) they’re not hurting the way they should be. The next time someone blames the unions without so much as a mention of executive pay – current and for the past decade – I‘m going to blow a gasket. Forget the cars and trucks, start selling snake oil, boys, ‘cuz you sure done sold some to your board. Whoever agreed to give Rick Wagoner a dollar for this year ought to reconsider. In the meantime, GM should declare bankruptcy and restructure, rather than be spared that fate. Otherwise, we’ll just see a lot more of the same, and, frankly, I don’t think we can afford it.
G.M. has until the end of this month to reach deals with the U.A.W. and its bondholders and to show President Obama’s auto industry task force that it is making progress on the restructuring plan that it filed with the Treasury Department in February. If it misses the deadline, G.M. would be unlikely to receive the additional loans it says are needed, and the government could demand immediate repayment of G.M.’s outstanding loans.
G.M. said in Thursday’s filing that it had no way to repay the loans right now and could soon become insolvent without at least $9.1 billion more aid. It wants a total of $30 billion.”
There’s a deal with teeth, huh? They follow the plan or they have to repay the money we’ve already forked over. They say there’s no way to repay it and they need more to follow the plan. That pit is deeper and darker than the well of populist anger, I don’t think we need plumb its depths any longer.