Tag: CEOs

It Is All Labor’s Fault!

How about a small reality check?

GM is sucking hind tit, Chrysler is whining and selling off assets, Ford has hit bottom and now I hear from various circles that it is labor’s fault that the auto industry is crashing. The Unions and the workers negotiated and got higher pay, better benefits, etc. Afterwards, the companies whined that they could not afford the increases. Now that the slowdown has hit the industry it is costing jobs and such. Now all the gains that labor has made in the past has come back to bite them in the butt and makes them the obvious scapegoat for the industry’s problems.

First of all, let me lead with this statement—What a crock of crap! The auto industry is crapping out because of the decisions made by management, not the workers. These CEOs, COOs, CFOs, all knew what was happening in the economy and what trends were on the horizon. The workers did not design the cars or make the decision on what models were to be produced. The workers did not decide what bad investments to make.

Management teams were chosen on the promises of an increase of dividends to investors. In return these teams made millions even if they put the company in a bad light. If these teams were caught flat footed by the situation, then I say that they are not worth the millions they are receiving as compensation. Workers did not make these horrible decisions. The workers did not set out to destroy the auto industry.

Please stop blaming labor for the auto industry putting itself into the crapper. To blame labor and unions for any of the economic woes of the auto industry in this country is just plain—let me spell it out for you—S-T-U-P-I-D!

Yet Another American Axel UpDate

American Axle CEO Richard Dauch was awarded an $8.5 million bonus for defeating the three-month strike by 3,650 auto workers and successfully imposing deep wage and benefit cuts on the company’s hourly workforce, according to a Securities and Exchange Commission filing last Friday.

In addition to the bonus Dauch received $1.5 million salary, stock awards and other compensation, which brought his total to $18.7 million in 2007, more than double his compensation in 2006. Dauch, one of the highest paid auto industry executives, has pocketed over $300 million since leading a group of private investors who took over several auto parts factories from General Motors in 1994.

Auto workers in Michigan and New York went on strike last February to oppose wage cuts of up to 50 percent. The bitter 87-day walkout was isolated and betrayed by the United Auto Workers bureaucracy, which had agreed to substantial rollbacks even before the strike began.

The new contract cut wages from $28 an hour to $14.50 and to as low as $10 an hour at the company’s Three Rivers, Michigan plant. In addition, the company is closing two plants and eliminating 2,000 of 3,650 jobs, including 1,100 in Detroit.

The board’s compensation committee—made up of fellow millionaires, including auto executives and Wall Street investors—decided to award higher bonus payments to “reward AAM’s leadership team for their accomplishments and commitment during a period of significant change in our industry and to motivate them.”

Due to the “successful resolution of our negotiations with the UAW,” the statement read, the compensation committee had scrapped its plans to give executives a 4 percent increase based on the company’s posting of a $37 million profit last year. Instead the top executives were given increases of from 44 to 200 percent.

During the course of the strike Dauch repeatedly insisted the company could not afford to pay wages of $28 an hour. He insisted that such wages were not “market competitive” and that it was necessary to eliminate “the Detroit entitlement mentality,” by which he meant the belief that workers should be able to make a decent wage and have certain benefits.

As usual the union bureaucracy came down on the side of the profiteers and left the workers out to dry.  Personal opinion is that it is time for the workers, ALL workers to find new leadership.

Scientist Calls For Energy CEOs To Be Held Responsible

In testimony before the US Congress on Monday, James Hansen, a leading climatologist, called heads of major energy companies criminals who should be prosecuted for deliberately spreading false and misleading information about the threat posed by global warming.

Hansen, director of NASA’s Goddard Institute for Space Studies (GISS), testified before the House Select Committee on Energy Independence and Global Warming to mark the 20th anniversary of his initial appearance before Congress in 1988. He generated the first significant public awareness of the issue of global warming by telling the Senate at that time that manmade greenhouse gasses were raising global temperatures.

Since then climate scientists have reached a virtually unanimous consensus that the burning of oil and other fossil fuels results in additional atmospheric carbon dioxide, trapping heat. The amount of carbon dioxide in the atmosphere has increased greatly over the last century, and global temperatures are rising as a result.

Hansen decried the extremely limited official goals set for reducing carbon emissions calling them “a recipe for global disaster.” He called for a moratorium on the construction of coal burning power plants and the development of carbon free alternatives to coal and petroleum.

Hansen indicted the energy conglomerates for blocking action on global warming. “Instead of moving heavily into renewable energies, fossil fuel companies choose to spread doubt about global warming, just as tobacco companies discredited the link between smoking and cancer. Methods are sophisticated, including funding to help shape school textbook discussions about global warming.”

Despite Hansen’s compelling testimony, there are no indications that US policy will change. Since Hansen first appeared before Congress in 1988, neither the Clinton administration nor the administrations of George H.W. Bush and George W. Bush have passed any major legislation restricting greenhouse gas emissions. There have been 21 coal-fired power plants constructed and US emissions of carbon dioxide have risen by some 18 percent.

The domination of the energy sector by a handful of private monopolies and the subordination of both the Republicans and Democrats to these powerful interests blocks the adoption of any serious measures to deal with the looming catastrophe posed by global warming. These multibillion dollar corporations will not tolerate any measure, no matter how critical for human survival, that impinges on their profits.

Further, any strategy to oppose global warming requires a coordinated international effort. However, energy companies dominate US foreign policy as well, dictating a strategy that seeks to secure world hegemony, including the invasion and occupation of Iraq and other oil rich regions of the world.

Someone Is Profiting From The Slow Economy

While you are struggling with high gas, high food, foreclosures and a completely dysfunctional economy, there are some that are doing well regardless of the dark days to come.

Average CEO compensation grew by 3.5 percent last year despite slowing economic growth, falling profits and mass layoffs, according to an Associated Press review published Monday. The review found that the S&P 500 CEO received an average yearly compensation of $8.4 million, up $280,000 (an average raise that is the equivalent of six times the US median household income) during 2006.

The data render ridiculous those apologies for social inequality resting on the idea that CEO pay is linked to ‘performance’ in some meaningful way. The Associated Press review found that “CEO pay rose or fell regardless of the direction of a company’s stock price or profits.” The report also notes that half of the 10 best paid CEOs—who collectively hauled in half a billion dollars last year—presided over companies whose profits shrank “dramatically.”

John Thain, the CEO of Merrill Lynch, ranks first on the list. He received $83 million in compensation for the year, despite presiding over a company that posted a $9.8 billion loss in the fourth quarter. He replaced former CEO Stanley O’Neal on December 1, 2007. O’Neal left the bank with a compensation package worth over $161 million, despite his direct oversight of the bank’s gambling with mortgage-backed securities that ultimately exploded in 2006-2007.

Likewise, John Mack of Morgan Stanley, also in the top 10, received a compensation package worth $41.7 million, even though his firm announced the writing down of $9.8 billion worth of loans and a loss of $3.61 billion in the fourth quarter.

And what have been the social consequences of all this? Who has paid the cost of this enrichment of a tiny layer at the top of the social ladder? According to the latest estimates, one in twenty Americans will soon have negative equity in their homes, and millions already face foreclosure. Energy prices have shot up by 17 percent in the past year alone. Real wages have fallen by about 1 percent during the same period, with far steeper declines threatened.

Now do you feel better?