Thursday, January 12, 2006

Don't Cut My Pay!

I have repeatedly called for top to bottom pay and benefit cuts at GM. I think most people not directly connected to the business would agree with me but apparently some people in the executive offices do not. GM Vice Chairman and product chief Bob Lutz feels that his lost bonuses and the decline in value of his stock options are enough of a cut. I will admit that these are huge but his failure to accept a cut in base pay while asking others to accept one is hypocrisy. He should be setting the example. (After all, the union could point to changes in healthcare as all the costs that the workers should suffer - I see it as the same thing.) I don't begrudge generous pay to executives of successful companies, but GM is not successful at the moment and it is as much the executive's fault as anyone's. (I would rather see a successful executive paid millions every year than a baseball player or an actor - a successful executive is improving everyone's life. One in struggling or declining company needs to suffer with everyone else.) When good times return, he will benefit far more than others, and if he turns out to be part of the solution then he should benefit when times get better.

Lutz's reasoning about a cut causing a talent drain in GM is worth noting and is a valid point, but it would be more convincing if it wasn't the same people who caused the problems in the first place.

He said "The capability of successfully trying to turn around an unsuccessful automobile company is a very rare and highly sought after skill set. And you do the shareholder no good whatsoever by reducing compensation to the point where everybody leaves." I have seen no evidence that he is the person to turn that company around.

5 Comments:

Blogger armed_and_christian said...

I have argued a similar point with Senator Lugar, who claims that the Senators "deserve" to vote themselves a pay increase each session because "it attracts the best and the brightest."

My answer is the same as yours: if this is the best you can do, forget the pay increase (or in GM's case, take the pay cut) and let's get some new blood in here.

I also told him that he is an employee of the people, and as such, he should ask his constituents whether or not they feel he deserves an increase in pay. Perhaps the GM stockholders should examine this line of reasoning with their executives.

7:21 PM  
Blogger Crazy Politico said...

Gotta agree, if you want the line workers to take a cut, take one yourself.

BTW, the biggest pay cut should go to the genius who decides to build 9 million Cavaliers a year so they can rot on dealer lots, but not enough Solstices to come close to the demand.

7:39 PM  
Blogger The Conservative UAW Guy said...

Bill Ford cut his pay to zero until they're back on track (Ford, that is).

I'm suprised Wagoner still has a job.
As an employee, i'm not real happy with him. As shareholder, I am appalled.

8:03 PM  
Blogger shoprat said...

A&C I personally believe that senators and representatives should be paid by the state they represent. That would hold them accountable at least to the state legislatures if not the people.

CP and CUG You're both right

9:44 PM  
Blogger Lone Pony said...

Senators and representatives paid by the state they represent? Hold them accountable? Good idea.

6:43 AM  

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