GM executive Bob Lutz has rejected the suggestion by billionaire investor Kirk Kerkorian and his aide Jerry York that General Motors should reduce executive pay to help stem losses. York believes autoworkers shouldn’t be the only ones asked to make sacrifices, and executives should take cuts, too. But Lutz disagrees. “Here’s where people get this wrong: They say, ‘Why are executives paid so much? You have to ask: Why are professional athletes paid so much,” Lutz said. “The capability of successfully trying to turn around an unsuccessful automobile company is a very rare and highly sought after skill set. And you do the shareholder no good whatsoever by reducing compensation to the point where everybody leaves.”
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01/12, 3:32 PM
posted by:
Otis Wildflower
Yeah, well pro athletes and execs in other industries tend to be judged more harshly on results than in the inbred Grosse Pointe auto exec community.
Cut salaries or start firing those fools. You can’t have it both ways, at least while the investors are watching.
Oh, and please stop making ugly interiors. You’re doing better, but you really need to take all your interior designers who don’t copy the Germans or Japanese out behind the woodshed. How long did GM have 2 keys that weren’t omnidirectional?
01/12, 4:51 PM
posted by:
jimothy
Mr. Lutz: Before you laud you and fellow your execs, and justify their exorbitant pay, for turning around GM, why don’t you TURN IT AROUND, FIRST! If you do that, then you should all get a well-deserved pay raise. In the meantime, ask yourself how many of these well-paid execs are responsible for the mess that GM is currently in.
01/12, 5:21 PM
posted by:
BCM
Executives of most foreign-based corporations, even very successful ones, are generally paid less, both in absolute terms and as a multiple of their average employee, than executives of US corporations, even very unsuccessful ones. Since many management functions need not be performed on-site, it would be logical for US companies to be outsourcing their management to lower-cost foreign countries. But they don’t; they outsource labor and skilled technical jobs. There is a tremendous disconnect between the capitalist theory that stockholders are the owners of the corporation, and the frequent reality that boards and management run the companies for their own short-term benefit.
Few people can work for the symbolic $1 a year like some executives of troubled corporations, like Steve Jobs of Apple; but the notion that these people are so talented and irreplaceable that their salaries can’t be cut until improved performance justifies increasing it is nonsense. Refusal of management to cut back contributes to employee intransigence.
01/13, 10:25 AM
posted by:
Guido
If I remember this correct GM was in good shape when Lutz started his work. All the mistakes during the last years (FIAT, Hybrid, cars…). If you arrive at a company in trouble and turn it around, ok, but if you bring it in trouble you should get fired and not earn big $$$. I hope GM will make it, but they probably need a new top management.
01/17, 6:14 PM
posted by:
bradk
What a putz. Only someone that self-involved and detached from reality would say that. As far as I know, it’s not the fault of the line-workers that they had to build a Pontiac Aztec. The fact remains that the most horribly designed vehicle of recent times (even for Pontiac) got the go-ahead in the first place.
You’re telling me that the execs involved with that utterly miserable program that left unwanted vehicles selling for under cost shouldn’t see a reduction in pay? Get real.