Dec 07 2008
Big Three executives under fire from congress
Congress today stepped up scrutiny as further negotiations for a possible bailout of the auto industry progressed. Speaking on CBS’s Face The Nation, senator Chris Dodd had some pretty bold things to say about The Big Three.
“I think you have got to consider new leadership,” Dodd said. When further pressed as to whether or not this would be necessary for the bailout he said, “I think it is going to have to be part of it.”
“I think it’s clear GM is in the worst shape,” Dodd said before calling on Rick Wagoner, the chief executive of GM, to step down.
President-elect Barack Obama appears to be on board with this idea as well. Accusing The Big Three executives of a persistent “head-in-the sand approach” to problems, Obama said he felt that Congress was doing “the exact right thing” in drafting legislation that “holds the auto industry’s feet to the fire” at the same time it tries to prevent its demise.
This is very reassuring to me. If these executives aren’t willing to change, then Obama is showing he’s not going to be afraid to force it on them.
“The last thing I want to see happen is for the auto industry to disappear, but I’m also concerned that we don’t put $10 billion or $20 billion or $30 billion or whatever billion dollars into an industry, and then, six months to a year later, they come back hat in hand and say, `Give me more,’” said Obama.
Hopefully we’ll see some of this in our financial markets as well. Starting with AIG. The company has received over 150 billion dollars in aid from the government so far, but just Friday announced that they were doubling the salaries of their top managers. This came after the firm announced that it was cutting executive bonuses to help deal with the crisis. So this is how they dole out the money instead?
“We’ve said they aren’t eligible for annual bonuses, and they’re not,” Nicholas Ashooh, spokesman for AIG, said today in an interview. “What we’re talking about are retention agreements — they’ve been pushed back by several months — and it’s our hope that those businesses will be sold in several months.”
Oh wait never mind, that’s a completely different thing. Yeah, sure, a retention agreement. Are you fricking kidding me?
“The expectation from the public and Congress was that they weren’t getting bonuses, not that they’d be pushed off by several months,” said David Schmidt, a consultant at executive pay firm James F. Reda & amp; Associates. “That clearly violates the spirit of AIG saying they’ll forgo their bonuses.”
Yeah but without those bailouts and bonuses, er, retention agreements, how could they keep affording to go here right?
haha. Travis, you are such an asshole sometimes :)
What happens to the managers who bought houses they couldn’t afford or made investments in the stock market with money they thought they were going to get in bonuses this year and now with the credit crunch they don’t have that cash and are inturn taking huge loses trying to pay those “investments” off…
I know we tend to get caught up and think that this only affects the working man who didn’t have any control but the leaders of the companies are taking hits as well.
GMs problems, in my humble opinion, is not that they are making cars and trucks that don’t meet the people’s needs but rather it is the workers unions with in GM. until they are willing to recognize that the whole industry is in trouble of being cast aside and take a pay decrease then they soon will find out what cyclical unemployment means.
Detailed Study…..
gud keep it up sir
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