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Thread: GM Pushing US To Sell Stake

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    Re: GM Pushing US To Sell Stake

    To be clear on this, I have absolutely NO problems with a company managing itself poorly. None at all. If that's what GM execs want to do, at the expense of the company, I have NO ISSUE AT ALL WITH IT.

    Up to the point that I am invested in them. So long as everything gets paid back to the TARP fund, I have no issue at all with them running that company into the ground, beyond, of course, my sadness at the inevitable death of the Corvette.

    But I hold faith that, should GM be allowed to fail, some other hot shot will step in and fill the void, and a gleaming Corvette replacement won't take long at all to reach market.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by KevinKohler View Post
    "But the newspaper said GM executives are now chafing at that, saying it hurts the company's reputation and its ability to attract top talent due to pay restrictions."

    That's the sentence in question. The part in bold is what I am referring to, within the sentence in question. Ginormous bonuses fall under the category of pay, and, I would imagine, are part of that "pay restriction" in the later part of the sentence being discussed. "Top talent" refers, MOST LIKELY, to executive level officers, NOT to engineers, designers, etc. The very BEST engineers can hope to make, what, 250K a year? THAT pay is not restricted at all. So, one deduces, using logic and reason, that the top talent being discussed IS, in fact, senior level executives...the ones who, prior to the bailout and subsequent government take over of the company, were granting each other bonuses in the neighborhood of one million or more, EACH, despite flagging sales, DESPITE poor stock performance, DESPITE poor management, and DESPITE a very bleak future P and L projection, due to all the prior issues listed.
    Um, with all due Respect, Harley Earl, was one of the top tier execs. Zora Arkus-Duntov was one of those top tier execs. Dave McLellan was one of those top tier execs. Your engineers certainly can and do make the dig bucks....and attracting them takes both money and position.

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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by American View Post
    Let's get something straight pal, Obama saved union ass in that deal. That's what it was all about. It had zero to do with saving GM execs.
    Correct. But the exec's were the ones to drive the company under.

    last I checked, a union has a TOTAL ZERO in ordering a USA company around.

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    Re: GM Pushing US To Sell Stake

    [QUOTE=274ina;1060924218]Correct. But the exec's were the ones to drive the company under.

    last I checked, a union has a TOTAL ZERO in ordering a USA company around.[/QUO

    If they have a voting stake then they do have a say. Last I checked the union had a major stake in the company.
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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by Lutherf View Post
    Um, with all due Respect, Harley Earl, was one of the top tier execs. Zora Arkus-Duntov was one of those top tier execs. Dave McLellan was one of those top tier execs. Your engineers certainly can and do make the dig bucks....and attracting them takes both money and position.
    And when were those people active in the company? We're not here to study guys that had been with the company since the 50s or earlier, know what I mean? And you're not even addressing my point. I imagine purposefully so, lol. What's the going rate of an engineer, even one as brilliant as Duntov, the man who designed the car in my avatar? Their pay is not being restricted. Try to stay on topic.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by KevinKohler View Post
    And when were those people active in the company? We're not here to study guys that had been with the company since the 50s or earlier, know what I mean? And you're not even addressing my point. I imagine purposefully so, lol. What's the going rate of an engineer, even one as brilliant as Duntov, the man who designed the car in my avatar? Their pay is not being restricted. Try to stay on topic.
    Look, here's the problem GM is having -
    http://www.treasury.gov/initiatives/...%20VERSION.pdf

    The link is to TARP mandated compensation restrictions GM is subject to for it's top 100 most highly compensated employees (actually the bottom 74 of the top 100 because the top 25 are subject to additional restrictions). Note that bonuses and such MUST be issued in stock. If GM is going to attract top talent and be forced to issue bonuses in stock and the government possession of the stock is weighing it down then the government is screwing GM.....and all the employees subject to TARP restrictions.

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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by Lutherf View Post
    Look, here's the problem GM is having -
    http://www.treasury.gov/initiatives/...%20VERSION.pdf

    The link is to TARP mandated compensation restrictions GM is subject to for it's top 100 most highly compensated employees (actually the bottom 74 of the top 100 because the top 25 are subject to additional restrictions). Note that bonuses and such MUST be issued in stock. If GM is going to attract top talent and be forced to issue bonuses in stock and the government possession of the stock is weighing it down then the government is screwing GM.....and all the employees subject to TARP restrictions.
    Actually, only 50% of incentive pay, that is, things like bonuses and such, must be in stock form, or other long term payment. Which is reasonable, in my opinion. It forces those that run the company to really have some skin in the game. I mean, if I don't even WORK there, and yet, I've got skin in the game...why shouldn't the people that actually make the decisions about how the company operates have some in, that is PERFORMANCE based? There's TWO big items, right off the bat, that more or less backs up my stance. They DON'T want stock options, because they DON'T want their pay to be limited to company success, and they DON'T want those bonuses to be performance based.

    As for cash payment, which is to say, salaries, everything is fine, ALL THE WAY UP TO 500K per year...past that, it seems to imply that further pay should be in the form of long term stock options. Again, putting skin in the game, so that some board doesn't hire some guy who just got done bleeding another company out, to bleed this company out, and make off like a freaking train robber, never to be heard from again, at least, not till the money runs out. And at 500K per year, we are NOT talking about actual engineers, sorry. We're talking about people who MAY be engineers...but are so in NAME only. People who, say, RUN the engineering dept, lol. I'll go back to Duntov, since YOU brought him up. He's known as the FATHER of the modern corvette. They're STILL using some of his designs. But guess what? He didn't start making the BIG bucks until he traded in his drafting supplies for a calculator and a desk. And you know what? That man had SKIN in the damn game...because the corvette was, until the day he died, his baby. He had a REASON for wanting the company to be a success. And the company did well. As do MOST ALL companies, with such men, with such devotion, behind the metaphorical wheel.

    And that's pretty much all you're linked info is trying to do...force the people with the 20,000 dollar desks to truly WANT their company to be successful, to NEED it, to be a part of the team.

    Is it wrong? From a free market standpoint, heck, from anything other than a fascist standpoint...yes, it is. But they took the money. They BEGGED for the money. These are the strings that come attached. My advice?

    They can either start focusing on their JOBS, which is to ensure the success of their company, and not just of themselves, OR they can accept the inevitability of crap mandates like this.

    Or we can let too big to fail companies...fail.

    What's it gonna be?
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

  8. #18
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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by KevinKohler View Post
    Actually, only 50% of incentive pay, that is, things like bonuses and such, must be in stock form, or other long term payment. Which is reasonable, in my opinion. It forces those that run the company to really have some skin in the game. I mean, if I don't even WORK there, and yet, I've got skin in the game...why shouldn't the people that actually make the decisions about how the company operates have some in, that is PERFORMANCE based? There's TWO big items, right off the bat, that more or less backs up my stance. They DON'T want stock options, because they DON'T want their pay to be limited to company success, and they DON'T want those bonuses to be performance based.

    As for cash payment, which is to say, salaries, everything is fine, ALL THE WAY UP TO 500K per year...past that, it seems to imply that further pay should be in the form of long term stock options. Again, putting skin in the game, so that some board doesn't hire some guy who just got done bleeding another company out, to bleed this company out, and make off like a freaking train robber, never to be heard from again, at least, not till the money runs out. And at 500K per year, we are NOT talking about actual engineers, sorry. We're talking about people who MAY be engineers...but are so in NAME only. People who, say, RUN the engineering dept, lol. I'll go back to Duntov, since YOU brought him up. He's known as the FATHER of the modern corvette. They're STILL using some of his designs. But guess what? He didn't start making the BIG bucks until he traded in his drafting supplies for a calculator and a desk. And you know what? That man had SKIN in the damn game...because the corvette was, until the day he died, his baby. He had a REASON for wanting the company to be a success. And the company did well. As do MOST ALL companies, with such men, with such devotion, behind the metaphorical wheel.

    And that's pretty much all you're linked info is trying to do...force the people with the 20,000 dollar desks to truly WANT their company to be successful, to NEED it, to be a part of the team.

    Is it wrong? From a free market standpoint, heck, from anything other than a fascist standpoint...yes, it is. But they took the money. They BEGGED for the money. These are the strings that come attached. My advice?

    They can either start focusing on their JOBS, which is to ensure the success of their company, and not just of themselves, OR they can accept the inevitability of crap mandates like this.

    Or we can let too big to fail companies...fail.

    What's it gonna be?
    As far as letting the "too big to fail" companies fail......damned straight we do! It makes no sense whatsoever to keep on propping up a company that is so horribly under water that they can't recover. Let 'em go BK and have the pieces and parts snatched up by outfits that can do something with them.

    As far as the stock options you mention, LOTS of people at GM and other large, publicly held corporations receive options. Many of those people are EXACTLY the ones you describe who are the regular line employees...the engineers who get a base salary of $150k and the Assistant HR director for division 3 who makes $90k. The idea has ALWAYS been to get employees to have a little skin in the game.

    I'm not so sure why you have this hangup with highly compensated employees. The few people that manage to get into senior management positions are every bit as important to the company as the line employees....more so in most cases. There is a gigantic step between providing the services with which you are tasked and being the one who decides what those tasks need to be. There is also a corresponding step up in responsibility and ultimately in the liability that you present to the corporation and THAT is why these people are more highly compensated.

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    Re: GM Pushing US To Sell Stake

    [QUOTE]
    Quote Originally Posted by Lutherf View Post
    As far as letting the "too big to fail" companies fail......damned straight we do! It makes no sense whatsoever to keep on propping up a company that is so horribly under water that they can't recover. Let 'em go BK and have the pieces and parts snatched up by outfits that can do something with them.
    Agree 100%. We now see what are money gets us, in terms of corporate bailouts, lol.
    As far as the stock options you mention, LOTS of people at GM and other large, publicly held corporations receive options. Many of those people are EXACTLY the ones you describe who are the regular line employees...the engineers who get a base salary of $150k and the Assistant HR director for division 3 who makes $90k. The idea has ALWAYS been to get employees to have a little skin in the game.
    Right, and what the government is trying to do, is roll that same idea up the ways a bit, to the higher end executives. But it seems to me, they object to this, and the only reason I can think of is, because they don't WANT stocks, they want CASH. Because CASH is a LOT less affected by the performance of their company.

    I'm not so sure why you have this hangup with highly compensated employees. The few people that manage to get into senior management positions are every bit as important to the company as the line employees....more so in most cases.
    Which is why it behooves us, and by us, I mean the loan holders, to see to it that THEY, too, have a decent amount of skin in the game, in the form of...GASP...maybe taking some pay cuts if the company THEY run does not fair well, and, GASP, not getting millions in CASH bonuses, instead, in long term stock options...you know, to make it so those people REALLY put their A plus effort into the deal...and if their A plus effort is less than what is needed, less loss on the companies, and therefor, the tax payer bailout funds.

    There is a gigantic step between providing the services with which you are tasked and being the one who decides what those tasks need to be. There is also a corresponding step up in responsibility and ultimately in the liability that you present to the corporation and THAT is why these people are more highly compensated.
    Except these people HAVE NO LIABILITY. Tell me, when GM was drowning, prior to the bail out, what were the top brass doing? Sweating bullets, or getting PAID? And I mean PAID. And what happened afterwords? Did they lose everything? What would happen, should GM go down in a roaring ball of fire? They lose their jobs, right along with the factory workers...but who gets hit the hardest, the guy with a 500 million dollar nest egg thanks to 500K a year and up salary for years on end, plus huge bonuses that, apparently, are in no way performance based, resulting in said roaring ball of flame...or the line worker? Can the line worker simply pick up and move on to the next job? Can the executive? I'm not arguing with WHY these people make a lot more money than the union idiot plugging tab A into slot B, I'm aware of it.

    What I'm asking is...why, exactly, would someone object to a mandate that imposes merit based financial rewards, and pay restrictions (past 500K a year), for a company that is floundering?
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

  10. #20
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    Re: GM Pushing US To Sell Stake

    Quote Originally Posted by KevinKohler View Post
    Right, and what the government is trying to do, is roll that same idea up the ways a bit, to the higher end executives. But it seems to me, they object to this, and the only reason I can think of is, because they don't WANT stocks, they want CASH.
    Right...kind of. I'm quite sure that they would be perfectly happy to receive the stock but their concern is that with the government owning 27% of the stock and calling certain shots in the management of the corporation that they also believe (rightfully) that the stock is being held back from its potential. In other words, it's not so much that the don't want the stock but rather than they want the stock AFTER the government gets out of the picture.


    Quote Originally Posted by KevinKohler View Post
    Which is why it behooves us, and by us, I mean the loan holders, to see to it that THEY, too, have a decent amount of skin in the game, in the form of...GASP...maybe taking some pay cuts if the company THEY run does not fair well, and, GASP, not getting millions in CASH bonuses, instead, in long term stock options...you know, to make it so those people REALLY put their A plus effort into the deal...and if their A plus effort is less than what is needed, less loss on the companies, and therefor, the tax payer bailout funds.
    Now you're talking about something different. The loans through TARP were paid off 2 years ago and as far as I know the government doesn't own any GM debt. What we're talking about is the equity stake that the government still holds and that is significantly different than the debt.


    Quote Originally Posted by KevinKohler View Post
    Except these people HAVE NO LIABILITY. Tell me, when GM was drowning, prior to the bail out, what were the top brass doing? Sweating bullets, or getting PAID? And I mean PAID. And what happened afterwords? Did they lose everything? What would happen, should GM go down in a roaring ball of fire? They lose their jobs, right along with the factory workers...but who gets hit the hardest, the guy with a 500 million dollar nest egg thanks to 500K a year and up salary for years on end, plus huge bonuses that, apparently, are in no way performance based, resulting in said roaring ball of flame...or the line worker? Can the line worker simply pick up and move on to the next job? Can the executive? I'm not arguing with WHY these people make a lot more money than the union idiot plugging tab A into slot B, I'm aware of it.

    What I'm asking is...why, exactly, would someone object to a mandate that imposes merit based financial rewards, and pay restrictions (past 500K a year), for a company that is floundering?
    The liability I'm talking about is the liability that the corporation has with regard to their decisions. If a line engineer screws up it might cost the company a few million dollars but if the division VP screws up it could cost BILLIONS. That's some pretty significant liability!

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