CEO Pay Cuts and Hybrid Road Trips by the Big Three

I and my family have been buying Hondas for years. My in-laws buy Toyotas. My good friend buys Hyundai's. Why would anyone want to buy a car or truck made by GM? Are they known for their quality, resale value, gas mileage, or what? Same questions for Ford or Chrysler? Do vehicles manufactured by these companies have some unique quality or features that are worth keeping?

Why the disdain for the rich? Is it envy? Or is it because you don't have the control over their lives to do with their money what you think is best?

I agree that an ethic of responsibility would be incredibly beneficial for companies whose CEOs operate with responsibility. But if the wind is blowing one direction, like Jim Wallis once said, "we have to change the wind." Legislation does not change the wind any more than throwing something in the air changes how gravity works. (I know this entry isn't about legislation, but we are talking about taxpayer money, and I know that those who Wallis tends to support are for legislating their ethics.)

OnStar. But with my Honda, I don't need OnStar :-)

I think the big fear about these companies going under is not that the vehicles won't be made anymore, or that Ford and GM aren't going to last as "American traditions." It's more that there are millions of jobs at stake.

Why buy a car from a company that is in management and financial turmoil? Wouldn't you think that could have an effect on the product? And the ability to provide meaningful warranties and viable dealerships?

Oh, I completely agree. I was just being fair to those who are a bit more sympathetic to the taxpayer help the "Big Three" are going to get.

Amazing how the conservative mentality's gung-ho for legislating their own moral preferences but are prepared to defend those they really have no problem with, such as greed, as off limits. Conservatives' hypocrisy was revealed over the past decade when they proved that they were against big government only for the other guy but not for themselves. Moral hazard if government helped the poor, but not when it bailed out the rich. Naturally the defense is for the pay of the CEOs and no attention at all to trying to save the comparative pittance of the average worker's 1/400th.

Who's defending the pay of the CEO's. Aren't they just doing what I would do in the same situation...getting as much money as I can? After all, the salaries are set by the board of the directors, which are interlocking, with CEO's from different companies sitting on the same boards and ensuring that their pay is as high as they can make it. Sort of like a good ol boy's club where if I scratch your back you scratch mine. Do you really think any of them in their sane moments really think they deserve the pay they are getting?

Would it be wrong if there really existed energy technologies that would free us from Middle East oil and these technologies were being suppressed? Something truly liberating would have to come out of the auto companies if the nation is going to go on.

Michael Moore says, "Don't bail out, buy out!"

So what to do? Members of Congress, here's what I propose:

1. Transporting Americans is and should be one of the most important functions our government must address. And because we are facing a massive economic, energy and environmental crisis, the new president and Congress must do what Franklin Roosevelt did when he was faced with a crisis (and ordered the auto industry to stop building cars and instead build tanks and planes): The Big 3 are, from this point forward, to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail (a corresponding public works project across the country will build the rail lines and tracks). This will not only save jobs, but create millions of new ones.

2. You could buy ALL the common shares of stock in General Motors for less than $3 billion. Why should we give GM $18 billion or $25 billion or anything? Take the money and buy the company! (You're going to demand collateral anyway if you give them the "loan," and because we know they will default on that loan, you're going to own the company in the end as it is. So why wait? Just buy them out now.)

3. None of us want government officials running a car company, but there are some very smart transportation geniuses who could be hired to do this. We need a Marshall Plan to switch us off oil-dependent vehicles and get us into the 21st century.

Do you mean to say that you either believe that morality should be legislated in all instances or in no instances? Surely you can think of cases in which it should be legislated and others where it shouldn't be. If so, you're no different than the "conservatives" you criticize.

With 4& of the world's population but 25% of the world's prison population. it's clear to all but the most draconian legalists that way too much "morality" has already been legislated in America. Some seem to have missed the connection that legalism isn';t the solution, the development of individual conscience is. Arbitrary, punitive legalism is how authoritarians and totalitarians rule.

I agree with you that legalism isn't the solution. Here in the U.S. we're entirely too interested in making laws rather than changing hearts. But if that's your belief you should be cheering on those who are against trying to legislate against greed rather than criticizing them.

In some regards I am very happy we are faced with this "bailout Detroit" question. Because I really don't think it is so much about Detroit as it is about us.

Detroit is the United States--the good, the bad, and the ugly. An affluent, prosperous and upstart nation; full of innovation, capitalism, and industry; bull-dozing the nation; freeways; interstates; parking lots; urbanization; suburbanization; exurbanization and on and on.

The money class in the city of Detroit pulled out of the core city 40 years ago. The car builders successfully built an international market. And they got run over by becoming fat and lazy in a fat and lazy culture. Why can Honda build a plant down the road with American workers and run Detroit into the ground?? Because Honda is not America. The culture of the company requires American workers to cease functioning as Americans.

So we are faced with what to do with ourselves--and the world we created. Do we borrow cash from China, put our grandchildren into debt, so as to buy some time to get off our lazy/ and fat behinds??? Do we allow Congress to look down their noses at the Big 3 as if the government has had nothing to do with the shaping of this culture so profoundly organized around automobiles, energy, roads, etc?

When is that "Change" thing going to happen?

Nobody builds a better truck than GM, and American auto makers have closed the gap on the quality and gas mileage end. My grandparents own a Buick LeSabre and get 32 mpg on the highway. American brands typically ride better as well. Detroit's biggest problem is that they can't make their cars "cool."

Just let these monsters fail. Or buyout , not bail out.

I say put up some start up money to fund more rail, new car makers modeled on the best models of efficiency and recyclability and make all American companies start planning for the post oil world.

Unfortunately it isn't war criminals, torturers, and wall street swindlers who are filling our prisons though they seem to be plenty dangerous. Certainly there seem to be other countries which contain criminality without putting so many in prison, but all complex societies need a legal framework to enforce their cultural values. The idea that there is some way to change enough hearts to have a lawful and morally balanced society without laws seems like wishful thinking.

Law is not necessarily punitive. It can also incentivize good, smart, ecologically and economically sound behavior . It is not punitive to prevent toxic dumping. If all economic activity is safe and non coercive the entire human and eco community benefits. I think one of the challenges is to have goals that are good for all but to avoid being prescriptive about how to achieve those goals.

We have far too many businesses that benefit shareholders and or owners etc. at the expense of others. Through history and to this day that expense to others has run the gamut from the cruel exploitation of children to disasters like Bophal, Chernobyl, the Exxon Valdez that affect many lives and large areas of the planet.

The essence of Law is to compel us to treat others as we would be teated.

The current administration just passed laws that lift protections against the devastation of watersheds and mountain valleys from mountaintop mining. This gives a kind of freedom to coal companies but costs others their homes and does not make the coal companies pay for the harm they do. To me this is not freedom but the tyranny of greed and power. It is destroying the earth.

I wonder if the CEO's will actually do any driving or will they just be passengers? It probably wouldn't be a bad idea for them to spend at least 10 or 12 hours driving each of their models, pulled at random off the line, just to see first hand what kind of products they're turning out? Do you think they do that kind of thing on a regular basis?

The automakers have become victims of their own success, along with the clout they've had with our government because of the number of people they employ. Today in the USA, we have almost as many private vehicles on the road as we have people of legal driving age. And because of quality improvements (yes, even by GM and Ford), the number of new cars sold has exceeded the number of old cars scrapped since the early 1990s. So the US auto market is essentially saturated. You need to buy another car? There are plenty of reliable used vehicles on the market.

Further, they've succeeded, through their lobbying efforts along with those of the trucking and road construction industries, to have government subsidize their business through new highways. Along with local zoning laws, which have long separated residential from commercial; the neglect and ultimate demise of intercity rail transport and, in many cities, public transportation systems; and the availability of inexpensive farmland on the edges of our urban areas for new home construction, we have succeeded in making most US residents dependent on their vehicles for almost everything they do outside their homes.

I will support government assistance to the auto industry only under certain conditions. First, the automakers have to go green. In exchange for taxpayer bailout money, they must be required to make fuel efficiency their number 1 engineering goal. And number 2 must be designing cars to run on alternative, nonpolluting energy sources. When they return to profitability, they must be required to pay the taxpayers back by funding for a high-speed intercity rail network and urban transport systems. And we must all--automakers and the rest of us alike--work on ways to reduce urban sprawl, which continues to make us even more dependent on cars.

I'm not sure I trust the current auto execs to come up with plans to do any of this. After all, they're responsible for the fuel-wasting SUV end-run around fuel economy regs. And they're the ones, especially GM's execs, who have watched as their businesses continue to lose market share to Honda and Toyota. If any believe that they really have a viable business plan, then I've got some swamp land in Florida to sell them.

That's my two cents worth for the automakers. Despite the executives' hybrid car trips and other more recent PR moves (why didn't the three of them all pile into one car?), I hope the Senators and Representatives continue looking at this request with skeptical eyes. I think the first thing that should happen, before any tax dollars change hands, is that Congress should require them to assemble new executive teams whose minds are in the 21st century instead of the 1950s.

I agree fully with your point 1--see my comments below. As for the gov't's buying out GM--well, you know that's socialism, isn't it? You will incur the wrath of all the neo-liberals who write here. Of course, never mind that the gov't has already committed socialism through buying a stake in the banks.

For the environment's sake, as well as our sanity's, we need to wean ourselves away not only from petroleum but from dependence on automobiles. A Marshall Plan--maybe a better analogy would be an Apollo Plan--to redesign the way we get around is necessary, in my view. And the automakers need forward-looking management, not the ones that drove themselves into the ground.

Peace

I keep hearing the Big Three referred to as monsters. "Let them fail." "Let them die." That might be true in the larger corporate sense, but there are thousands of working class families that make up these corporate communities. As a life-long Michigander, I've seen my grandfather, uncles, cousins, and friends give their lives to US auto industry. There may be other manufacturing jobs created in the far future, but when and where? What are the families supposed to do in the mean time? Before we throw the book at the CEOs, remember they aren't they ones that will be loosing their homes and suffering to stay afloat--the trades people and line workers will be.

The largest importer of oil into the US is Canada. 2nd is a tie between Mexico and Saudi Arabia. How is this a "dependence" upon Middle East Oil?

The Auto makers UNIONS have become a victim of their own success, and they have dragged down the automakers with them.

Again, the factories will still be there. Someone will buy them, and start making cars. People don't let billions of dollars of capital sit idle for very long. Who cares if the machines are used to make Toyotas or Cadillacs? Michiganders needn't worry, in the long run. That is, unless the taxes there make it prohibitively expensive to invest in the capital.
Families are supposed to scrap and fight and work and continue educating themselves their entire lives always preparing for their next job. This is a dynamic, changing world, and anyone who expects tomorrow to be like today will find themselves unemployed when tomorrow comes.
The economy is constantly engaging in "creative destruction."
The car industry put a lot of horse-and-carriage firms out of business a century ago. The PC industry put typewriter manufacturers out of business. J.D. Rockefeller put whalers out of business.
You have no right to a job, no right to a home, no right to a standard of living. No one does. Suck it up. Move if you have to. There is always a job somewhere for a person who is willing to work, it just not pay as much as you want. Tough.
Nathanael Snow