Who Hijacked Our Country

Sunday, December 07, 2008

CEOs Who Beg for a Handout: “You’re Fired!”

Senator Christopher Dodd has come up with a common sense solution to the Detroit grovelings. It’s so sensible, in fact (coming from the government???) that you can’t help but wonder “OK, what’s the catch?!?!”

Dodd said the head of General Motors should step down, and he indicated that his firing could be one of the requirements if Detroit wants a handout. Dodd said: “I think you have got to consider new leadership.”

When he was asked if this should be one of the conditions for a bailout, he said: “I think it is going to have to be part of it.”

When I first saw that article, I was simultaneously thinking “YAAAAYY!!!” and “It’s about fuckin’ time!” It’s an excellent idea, but were they waiting for? Why haven’t we been doing this all along???

If you’re one of those peons who works for a living, it’s called “Payment On Performance.” It’s time for people in boardrooms and ivory towers to get familiar with that strange new concept. This should have been the standard procedure — set in concrete, immutable — since the savings and loan bailout of the 1980s.

Or at least since 1991 (I think that was the year) when the Detroit CEOs went to Japan to beg for a better trade deal. “Please buy our huge gas guzzlers that are too big for your narrow streets and the steering wheel is on the wrong side. Pleeeeeaase!?!?!?!”

It turned out that the more successful Japanese CEOs were receiving much smaller salaries than their American counterparts. We also learned that in Japan — during that period at least — it was considered dishonorable and shameful for a company to lay off workers. When it happened, it was done as a last resort, accompanied by shame and embarrassment.

Let’s hope the soon-to-be-toast CEO of General Motors becomes the prototype for the new standard procedure. When a powerful “too big to fail” company begs for a handout from the government:

1. The CEO and all senior executives are fired. And no Golden Parachute.

2. The new replacement executives will be on a greatly reduced salary until the company’s turnaround goals (clearly stated in the bailout agreement) have been reached.

3. In order to receive this taxpayer-funded gift basket, the company must agree — in writing — to submit to any and all government regulations that would have prevented this current crisis from occurring in the first place.

And now, in a related story: We’re all familiar with certain standard lies and fibs that are so common, they’ve become clichés. Punchlines.

“He was dead when I got there.”

“Your check is in the mail.”

“Your flight will be taking off shortly.”

And now this: “Taxpayers will get money back from the Wall Street bailout.”


cross-posted at Bring It On!"



Blogger Enemy of the Republic said...


Go Dodd!

December 7, 2008 at 5:53 PM  
Blogger Lew Scannon said...

That these clowns are still employed is amazing. And on top of that, they also get retention bonuses, even if the company is failing.

December 7, 2008 at 6:35 PM  
Blogger Tom Harper said...

Enemy: Maybe Dodd will start a trend.

Lew: Yup, it's amazing. Millions of dollars in bonuses no matter how much they keep fucking up. Nice work if you can get it.

December 7, 2008 at 7:21 PM  
Blogger Snave said...

Right on. There should be absolute proof that many things are going to change in the way the corporation or bank or whatever is going to be run before the government agrees to give then any financial aid.

They offered to work for $1 a year. I would gladly pay each of them, out of my own pocket, one dollar a year to not work.

These guys shouldn't be simply showing up in green vehicles with tails between legs before begging a second time, they should provide actual proof that things will be done differently. What better way to start than by getting rid of the people who have been driving the companies into the ground?

Is it time the federal government simply took over the auto industry? Probably not. But how are the jerks and parasitic types going to get weeded out, and more people with vision, imagination and can-do ideas installed? Maybe denying them some of the money they beg for is part of the answer.

December 7, 2008 at 8:09 PM  
Blogger Generik said...

It's been my experience, especially when it comes to government and corporations, that the more sense an idea makes, the less its chances of ever being implemented.

That said, I think this is brilliant, and good for Dodd for putting it forward. I would wholeheartedly support a proposal like this.

December 7, 2008 at 8:58 PM  
Anonymous S.W. Anderson said...

"The CEO and all senior executives are fired."

Are you sure you want that? I remember when Lee Iacocca was CEO of Chrysler, asking Uncle Sam for $1 billion loan. He had a plan — the K-cars — and volunteered to work for $1 a year until Chrysler was in the black (or the loan was repaid; I'm not sure which).

Iacocca brought the K-cars to market and they were a success, as were the company's minivans. Chrysler repaid the loan on time, with interest.

Maybe if Iacocca had been replaced the new guy would've done as good a job, but I doubt it.

OK, they're not all Iacoccas. But maybe it would be better to review individual cases and make a judgment, rather than impose a one-size-fits-all rule.

Now, let's take the case of a major corporation with a real jerk for a CEO. Think "Chainsaw" Al Dunlap, for example, when he was screwing up Sunbeam.

You might have one or more senior executives of the company who completely oppose what the CEO is doing, and who do what they can to minimize the damage, warn trustees of the problem, etc. Do you really want to can that executive, or maybe look at him or her as a possible replacement for the bad guy?

As for curtailing bonuses and golden parachutes, I'm with you 100 percent.

December 7, 2008 at 11:59 PM  
Blogger Tom Harper said...

Snave: Yeah, absolute proof. These multi-billion dollar bailouts need at least as much scrutiny as a small loan being requested by a middle class citizen. In other words, any failure to repay or failure to live up to any of the terms means the loss of their first born (figuratively of course).

Generik: That certainly is true. The only government job I ever had was when I was in the Navy a long time ago. Any idea or suggestion that made sense -- fuggeddaboudit!

SW: Sorry but I don't see any Lee Iacoccas anywhere. All I see is a bunch of inept self-absorbed trustfunded parasites who wouldn't know a day's work if it bit 'em on the ass. These pitiful tin-cup-in-hand CEOs (Detroit and Wall Street) are to Lee Iacocca what GW Bush is to Abraham Lincoln.

I also don't have any sympathy for executives who are "hamstrung" by what their CEO is doing. They're free to quit and take their talents elsewhere, to a functioning company. Otherwise they're just like all those crooks from the Bush Administration who stay and enjoy all the perks and wealth, and then leave and write a tell-all book.

Ordinarily I'm against that one-size-fits-all approach. But when things get desperate and out of hand, sometimes you have to throw the baby out with the bathwater.

December 8, 2008 at 12:38 AM  
Blogger Carlos said...

How these morons could ask for a condition-free handout to begin with is beyond me. The arrogance is stunning.

December 8, 2008 at 4:23 AM  
Blogger Tom Harper said...

Carlos: Arrogant and moronic, that sums them up.

December 8, 2008 at 12:38 PM  
Anonymous JollyRoger said...

There is no other way to make help for Detroit work. The Chief of Police that hired Pete Rose to run his anti-gambling task force would be considered a moron, so why would you even consider giving GM any financial assistance with Wagoner at the helm?

December 8, 2008 at 1:35 PM  
Anonymous JollyRoger said...

Are you sure you want that? I remember when Lee Iacocca was CEO of Chrysler, asking Uncle Sam for $1 billion loan. He had a plan — the K-cars — and volunteered to work for $1 a year until Chrysler was in the black (or the loan was repaid; I'm not sure which).

Iacocca brought the K-cars to market and they were a success, as were the company's minivans. Chrysler repaid the loan on time, with interest.

Maybe if Iacocca had been replaced the new guy would've done as good a job, but I doubt it.

Apples and oranges. Iacocca wasn't at the helm when Chrysler made the disastrous decisions that ran it into the ground. He was a fairly recent face on the scene, and he hadn't had a chance to even try to implement his turnaround.

December 8, 2008 at 1:36 PM  
Blogger Tom Harper said...

JR: Pete Rose and Wagoner -- good analogy. Birds of a feather.

December 8, 2008 at 3:29 PM  
Anonymous Bee said...

Tom, I completely agree with your rules of corporate welfare.

I'm betting there is an Iacocca out there somewhere, or at least one of his proteges. They need to get rid of the guys currently at the helm, and then start the replacement search. Maybe they could set it up like American Idol. Only without the americans voting - I know, we finally just voted in a decent fellow, but they did vote for Bush twice before that...

December 8, 2008 at 4:37 PM  
Blogger Tom Harper said...

Bee: I hope you're right that there's an up and coming Iacocca out there. If there is, he/she needs to start talking -- and come up with a detailed plan -- soon.

December 8, 2008 at 5:21 PM  
Anonymous S.W. Anderson said...

For the record, I'm not pleading to keep the automakers' CEO's and top executives in place. I just think it makes sense to evaluate them individually, now and in any future situation of this kind.

If nothing else, you might want to consider the old saw about the devil you know possibly being better than the devil you don't know.

December 8, 2008 at 7:06 PM  
Blogger Tom Harper said...

SW: I'll admit you probably have a more level-leaded approach than I do. I'm more anxious to just lash out and fire the whole bunch of them.

But as far as the "devil we don't know" goes, under my proposed rules the new executives will be working for a very limited salary and they'll be on probation and working under very strict, clearly spelled out conditions.

December 9, 2008 at 12:19 PM  

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