GM Cutting 1100 Dealerships Nationwide

[Angry Dad]

No Toyota execs aren't treated the same as Detroit execs.

http://www.workplaceanswers.com/News/Toyota-Hit-with-$190-mln-Sexual-Harassment-Lawsuit153.aspx

When they get into trouble, they get flown out of town and the suit gets settled quietly.

Or they make sure that they bust unions :

http://www.corpwatch.org/article.php?id=15182

Don't kid yourself, being a Japanese car company doesn't make you an angel.

Falling for their myths just makes you a fool.

[darwinism]

No Toyota execs aren't treated the same as Detroit execs.

http://www.workplaceanswers.com/News/Toyota-Hit-with-$190-mln-Sexual-Harassment-Lawsuit153.aspx

When they get into trouble, they get flown out of town and the suit gets settled quietly.

Or they make sure that they bust unions :

http://www.corpwatch.org/article.php?id=15182

Don't kid yourself, being a Japanese car company doesn't make you an angel.

Falling for their myths just makes you a fool.

Angry Dad, I agree - Falling for myths and smoke-and-mirror indeed are the makings of fools. Aside from links associated to behavior problems and actions towards unions, do you have hard solid facts pertaining to compensation of CEOs at foreign automakers versus US automakers?

[Retroit]

Regarding management, I think it's more than just they are overpaid. I think the wrong people are put into the jobs. Most foreign manufacturers are run by people who understand manufacturing: engineers. Most large domestic manufacturers are run by MBAs and finance guys. Not to mention Boards of Directors are all in bed with each other and provide no meaningful oversight to the running of a company other than to ensure jobs for each other. It's quite a joke actually. A sad, sad, joke.

Regarding the government doing more, we need to separate the issues. First, regarding the bailout and the government conditions being imposed. The objection to this is that the government was much harsher on the automakers than they were on the banks. Let's recall that the banks were complicit in the mortgage fiasco, while the automakers were the victims. I've actually come around a bit on this because I think that the government can be instrumental in getting all parties to agree on making changes that they otherwise wouldn't, but I'm still a little leery of politicians that think that just because they know how to run a political campaign, they know how to run a car company.

The second government issue involves the protection of US manufacturing industries vis-a-vis their foreign counterparts. Here, I think it is absolutely the duty of a government to protect its industries. That's not to say I'm a protectionist-isolationist. Rather we should raise the protective barrier [[tariff) to such a height that it will prevent foreign goods from pouring in in excess of American goods pouring out.

So, government has a place. It is in ensuring that our American companies are competitive globally.

Last, we have the unions, who, like you said are here to protect the workers. The only problem is that not all autoworkers are here in America. The unions have failed to realize that you can not have a protected workforce if the marketplace is not also protected. Once foreign goods are allowed to be sold in the States [[without tariffs), your protected union workforce has just become open to assault by lower wage foreign workers. The whole point of a union must be to protect ALL workers in that industry, foreign & domestic. The unions should demand that the politicians they have put in office make laws that require any country that imports goods into the US be subject to our labor laws, or be tariffed accordingly.

[Angry Dad]

Angry Dad, I agree - Falling for myths and smoke-and-mirror indeed are the makings of fools. Aside from links associated to behavior problems and actions towards unions, do you have hard solid facts pertaining to compensation of CEOs at foreign automakers versus US automakers?

Does anybody?

Why is it automatically assumed that since it isn't Americans, that the execs aren't "overpaid".

Consider professional athletes, overpayment knows no borders.

[darwinism]

Does anybody?

Why is it automatically assumed that since it isn't Americans, that the execs aren't "overpaid".

Consider professional athletes, overpayment knows no borders.

Angry Dad, you're side-stepping here, my friend.

Come on now, we both know for a fact that the American executives are grossly overpaid. Otherwise you would have linked us with evidence of the contrary, right?

Are you trying to side-track to the industry of professional sports too? I don't think anybody here on DetroitYes will disagree with you that professional athletes are overpaid. I know that I agree with you 200% that professional athletes, as well as Hollywood A-listers, are indeed overpaid. But then we aren't talking about the NBA, the MLB, the NFL, or the Oscars, in this thread.

So getting back on track, we're discussing the issue of GM and its incompetency, aren't we?

[Sstashmoo]

Quote: "we both know for a fact that the American executives are grossly overpaid."

Quote: "I don't think anybody here on DetroitYes will disagree with you that professional athletes are overpaid."

Simple economics, you get what you pay for. We used to read posts about the horrific salary that Mullaly got for coming to Ford, plus the astronomical bonuses he will receive, and how unfair it was. What is he worth now?

Regarding atheletes, the teams pay what they have to, to get the players they want. They can obviously afford it, they aren't filing bankruptcy.

[darwinism]

Quote: "we both know for a fact that the American executives are grossly overpaid."

Quote: "I don't think anybody here on DetroitYes will disagree with you that professional athletes are overpaid."

Simple economics, you get what you pay for. We used to read posts about the horrific salary that Mullaly got for coming to Ford, plus the astronomical bonuses he will receive, and how unfair it was. What is he worth now?

Regarding atheletes, the teams pay what they have to, to get the players they want. They can obviously afford it, they aren't filing bankruptcy.

What is Mullaly worth now depends on how well he is able to pull Ford out of this recession? As of today, Saturday May 16 2009, I'd say he isn't worth more than any other CEOs in the automotive industry. No more than the European auto CEOs, no more than the Asian auto CEOs. Provided that he takes FMC to the next level, get the Ford Fusion to the status of being the BEST-SELLING CAR IN AMERICA, then by all means, hand him the astronomical bonuses based on merit. In that case, it would be fair indeed.

Yes, agreed whole-heartedly, regarding pro athletes. But of course, we know and have witnessed the many examples of failed principles of economics in bad draft choices such as Charles Rogers, Ryan Leaf - just to name a couple. Simple economics doesn't always play out correctly. At the same time, who are we to complain as they are not filling bankruptcy, nor are they begging for taxpayer bailout.

[lilpup]

Regarding atheletes, the teams pay what they have to, to get the players they want. They can obviously afford it, they aren't filing bankruptcy.

No, but they constantly pressure municipalities for tax money or tax breaks for new stadia instead of paying out of their and their athletes sufficiently stuffed pockets.

[Sstashmoo]

I always chuckle at this outrage over CEO and executive salaries. It's like after someone buys something and a third party remarks "That isn't worth what they paid for it" Obviously it is, it just sold for that.

As Batts would say and he is quite right, it's just free market forces at work. What would you guys suggest regarding athletes and CEO's pay? Government set caps? Can anyone even imagine the backroom dealings taking place in that situation? It would be out-of -control.

[Kevgoblu]

[quote=Sstashmoo;20636]Quote: "we both know for a fact that the American executives are grossly overpaid."

Simple economics, you get what you pay for. We used to read posts about the horrific salary that Mullaly got for coming to Ford, plus the astronomical bonuses he will receive, and how unfair it was. What is he worth now? quote]

Mullaly had enough forsight to obtain financing for the company before the economic tsunami hit. That has alot of people feeling warm & fuzzy about Ford, but they most likely are in no better shape than GM or Chrysler. They merely obtained their financing thru the private market, rather than public.

At the end of the day all of the automakers have very similar cost structures, other than the legacy costs borne by the domestics. So following the GM/Chrysler emergence from bankruptcy they will have drastically reduced legacy costs in the form of retiree healthcare and pension obligations. They will also have a much smaller level of overhead associated with the dealer base. At that point in time, Ford will be the only manufacturer at a substantial cost disadvantage.

Mullaly's foresight did not make Ford a more viable company or change its business model, it merely put off the inevitable bankruptcy filing.

[Sstashmoo]

Quote: "At that point in time, Ford will be the only manufacturer at a substantial cost disadvantage."

And/Or the only domestic car manufacturer left. I agree, they probably aren't doing very well right now, but who is? They don't have a June 1st deadline looming? What is that worth?

I find it a bit ironic that many are so complacent, even seem relieved that the government is stepping in to straighten things out with these private companies. They've done such a slam-bang job managing their own budget, to the tune of 10 trillion in the red and counting.

[Angry Dad]

Angry Dad, you're side-stepping here, my friend.

Come on now, we both know for a fact that the American executives are grossly overpaid. Otherwise you would have linked us with evidence of the contrary, right?

Are you trying to side-track to the industry of professional sports too? I don't think anybody here on DetroitYes will disagree with you that professional athletes are overpaid. I know that I agree with you 200% that professional athletes, as well as Hollywood A-listers, are indeed overpaid. But then we aren't talking about the NBA, the MLB, the NFL, or the Oscars, in this thread.

So getting back on track, we're discussing the issue of GM and its incompetency, aren't we?

You aren't fooling anyone.

You have no idea what anybody anywhere is paid.

I have no idea or care what American execs are getting paid. Neither do you. Nor do you have any idea what foreign execs are paid. And you want the bottom line? It doesn't make a difference. It's not the point.

Call it a diversion or whatever but something strange has happened recently. Puts business in prespective. Toyota lost more cash the last quarter than GM. Honda more than Ford. Sure business is bad but don't those loses put some perspective on the profits they made? Like exactly how they did it? Like through floating the Yen lower deliberately? Where would they be if the deck wasn't stacked in their favor since 1995?

Look, society and order involves cost. We cannot suvive or thrive unless we accept the costs involved. I have no doubts that Japan and China see that our market does not defend itself. They are expoliting our weak trade policies with the full endorsement of our representatives. They are profitting and funding their social programs. If this was a matter of "water seeking its own level" it would be nature taking it's course in economics. It clearly is not. Even at that, it is a mistake to place the wants of a consumer above the needs of a nation. Even if the "fat executives" make too much money.

[darwinism]

You aren't fooling anyone.

You have no idea what anybody anywhere is paid.

I have no idea or care what American execs are getting paid. Neither do you. Nor do you have any idea what foreign execs are paid. And you want the bottom line? It doesn't make a difference. It's not the point.

Call it a diversion or whatever but something strange has happened recently. Puts business in prespective. Toyota lost more cash the last quarter than GM. Honda more than Ford. Sure business is bad but don't those loses put some perspective on the profits they made? Like exactly how they did it? Like through floating the Yen lower deliberately? Where would they be if the deck wasn't stacked in their favor since 1995?

Look, society and order involves cost. We cannot suvive or thrive unless we accept the costs involved. I have no doubts that Japan and China see that our market does not defend itself. They are expoliting our weak trade policies with the full endorsement of our representatives. They are profitting and funding their social programs. If this was a matter of "water seeking its own level" it would be nature taking it's course in economics. It clearly is not. Even at that, it is a mistake to place the wants of a consumer above the needs of a nation. Even if the "fat executives" make too much money.

I have no reason to fool anyone about anything. What have I to gain here at DetroitYes, a medal? LOL.

And for the record, yes, Angry Dad, I do know what they are paid.

As of the most recent data;

BMW CEO Norbert Reithofer - 2006/07 Compensation package of 2.7million euros [[US$3.6 million)

Toyota President Hiroshi Okuda - 2006/07 Compensation package of US$903,000

Toyota President Katsuaki Watanabe - 2007/08 Compensation package of US$1.0million

VW CEO Martin Winterkorn - 2006/07 Compensation package of 5.0million euros [[US$6.7 million)

Ford CEO Alan Mullaly - 2006/07 Compensation package of US$22.8million

GM former CEO Rick Wagoner - 2006/07 Compensation package of US$15.7million


Ladies and gentlemen, for what it's worth, the Japanese corporate compensation culture is extremely modest, compared to European and American standards. Those of you who have first-hand experiences dealing with the foreign auto suppliers can probably attest to that. There are lots, and lots of folks, here in our very own backyard, as well as here on the forum, who has absolutely no clue whatsoever - BUT they love to spread inaccurate rumors and wrong information, worst of all are the lies. Look, I can tell you this much, I want GM, Chrysler and Ford to succeed, because the flip-side would be disastrous. GM, Chrysler and Ford needs to succeed by changing the way they do things from the top all the way down the chain of commands, change the 'entitlement' mindset, change the attitude, be willing to compete and compete aggressively. When I walk into the GM and Ford dealerships, I will be observing all these traits.

[lilpup]

I suspect you know full well that that is not Mullaly's standard compensation package.

[Sstashmoo]

Again, how should CEO/executive pay be handled?

[56packman]

Re: the dealership closings, I guessing that most of these dealers who are beiing cut loose are in metropolitan areas already over-served [[in a non-alcoholic way) by dealers for that brand, the ones going most likely aren't rated high in customer satisfaction and compliance with factory procedures.
What tends to happen is that customers don't say "gee, I can't decide between the Toyota Camry and the Chevy Malibu, I guess I'll go see who will give me a better price". The customer who wants the Camry wouldn't take a Malibu if it was an outright gift, they are suscribers to the "all American cars are junk that break down constantly" line of thought. The customer for the Malibu is either acting out of patriotisim, or likes it, or has done his homework and knows it's a pretty good car, so he now can go to three dealers within 20 miles of his home, playing them against each other for price. The bad dealers need to go,this makes it easy for GM and Chrysler.

[darwinism]

Again, how should CEO/executive pay be handled?

Good question, Sstashmoo, perhaps it wouldn't be such a bad idea to go with how both our salary and pay package are being handled.

When I was hired into my job, I was offered a figure that was in the middle of the range for folks doing what I do, based on national salary surveys. I negotiated and was given a figure that is nearer to the top end of that range. Each quarter, there is a performance evaluation, to find out if I am contributing positively to the well-being of the company. If I do well, I get a raise. If I don't, I stay where I am for the time being. Next quarter comes around, and another performance evaluation. Basically, the bottom line is in the value I bring to the company - merit.

How about you, how is your salary and pay package handled?

My guess is that yours aren't very different from mine. Frankly, it becomes a problem when your salary is 15-20 times the salary of your MORE SUCCESSFUL peer. The problem is not whether you are worth the money, the problem is where the money comes from, and why your mediocre performance deserves a 15-20 multiples of your MORE SUCCESSFUL peer.

[stonechipped]

GM has done it again, they never cease to amaze me. The least of their problems is the dealerships

[ndavies]

GM has done it again, they never cease to amaze me. The least of their problems is the dealerships

The number of dealerships is just one of a long list of small problems. Every one of GM's problems has a similar argument. Each of the problems only takes a little bit out of the bottom line. Each problem is just a minor miss. Unfortunately, all the small and medium sized problems add up to a company in trouble. To get GM back on firm footing all the problems small medium and large have to be dealt with.

In May Gm had 6400 dealers Vs. Toyota's 1200. Toyota, at that time, was selling about the same number of cars as GM. There is a huge inefficiency in time and costs supporting all those extra dealers.

Also having that many dealers in shrinking markets cannibalizes the dealers profit margins. The dealers beat each other up to get the sales. This leaves them with fewer dollars for customer service and maintenance of their facilities. This leads to the crappy dealer service and the even crappier dealer rating numbers we see from JD Powers.

Having too many dealers erodes profits and further destroy customer perceptions.