Re: [Amc-list] Big 3 - My Take

[Frank Swygert <farna@xxxxxxx>]

The last part of your message concerns me the most too. Big business in the US has got way out of hand! You simply don't pay out big bonuses when you have to borrow money to stay solvent, no matter what! It's not just stupid, it's poor management in the first place. The only way to fix it is to get rid of current management and their practices. THAT'S why Mitt Romney suggested the companies file for bankruptcy. Chapter 7 (or is it 13?) allows for a court supervised reorganization, NOT a total shut down and/or sell out. THAT is what the big companies really need, someone to step in and say "wait a minute, you're losing money, how can you justify giving someone a bonus?" Apparently they think the general public and the government are idiots, but they (the big company execs) aren't. This applies to the auto industry AND to the bank bail-out. The bank bail money was supposed to put cash back into the economy, cash to flow to borrowers, not allow payments of bonuses and dividends.
  That was the bank's problem, but loaning them money to keep cash flowing for smaller businesses was a good decision. They are taking advantage of US!! 

I watched some of the congressional hearing with the auto maker execs. One of the congressmen asked who would be willing to sell their corporate jet and fly home commercial? None. Another asked if they'd be willing to do what Iaccoca did when he asked the government to bail out Chrysler in the 80s -- take a $1 a year salary until the situation improved. I didn't catch which one said they would, but only one of the three. If it were me on that chair I'd have at least told them I'd be willing to take a pay cut, but they were silent on the issue. They want money, but aren't willing to do anything that will affect them personally, apparently. You and I would have to tighten our belt to keep a business going, they don't want to. I lay a lot of blame on the unions for driving costs up, but why should the union make concessions when management/execs aren't willing to do the same? If the execs approached the union for concessions and showed them that they were slashing bonuses and wa
 ges on the top, THEN they might be more willing to work with them. But that isn't happening! It's "I want my pay, and I'm going to get it even if I take some of yours!" -- at least that's the way it appears. I'm sure there have been some small concessions on the top, smaller bonuses (that go into six and seven figures!), but I sure haven't read anything indicating there have been many upper management cuts over the last few years -- I think a couple execs were trimmed at GM a few years ago. Heck, they have "golden parachute" contracts anyway -- get rid of them early by paying several million in severance pay, even if the company doesn't have it...

Those companies SHOULD be able to somewhat predict what will happen in the future. It's tough -- sometimes you get it right, sometimes you blow it. But they should have at least had something on the drawing boards and in prototype that could be relatively quickly put in production. Detroit of today is not what it was in the 50s and 60s -- more lame ducks just "keeping on keeping on" than trying to really do anything new. 

------------
Date: Wed, 19 Nov 2008 18:32:49 -0500
From: John C Hughes <jchughes48114@xxxxxxx>
Subject: Re: [Amc-list] Big 3 - My Take

One last item to consider: According to Bloomberg, both Goldman Sachs 
and Morgan Stanley are scheduled to pay out bonuses of $6.85 billion and 
$6.44 billion respectively. These are firms that are being bailed out by 
the $700 billion package just passed by congress. Those two firms are 
getting bonus money equal to half what the Auto Industry is asking! Some 
news agency's are reporting that Wall street bonuses will approach $70 
billion dollars. That's roughly 3 times the amount the Auto Industry is 
asking. What is going on! I'm outraged!

-- 
Frank Swygert
Publisher, "American Motors Cars" 
Magazine (AMC)
For all AMC enthusiasts
http://farna.home.att.net/AMC.html
(free download available!)


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