Corruption in America:
Big Three Execs Get Huge Pay
To Ruin Auto Sector
by Richard Freeman
Since 2000, driven by shareholder value, the Big Three global automakers—GM, Ford, and DaimlerChrysler—have fired 100,000 American workers, more than 65,000 of them skilled auto production workers. In this process, they have utterly destroyed the advanced machine-tool capacity embedded in the U.S. auto industry. This year, the process of destruction intensified, with GM and Ford walking toward the cliff of bankruptcy. Yet for their efforts, deserving more of long jail sentences, the CEOs are treated to huge compensation packages. The chiefs of each of the Big Three—GM's Rick Wagoner, Ford's William Clay Ford, Jr., and DaimlerChrysler's recently retired Juergen Schrempp—have each hauled in between $10 and $25 million in total annual compensation.
GM and Ford executives have recently portrayed the problem at their companies, as being the payment of allegedly "expensive" worker health and pension benefits. GM publicly cries that it is being put at a competitive disadvantage by having to pay health care benefits. But GM is hiding corruption behind this public complaint. The management teams of these companies, often trained at the Harvard or Stanford Business Schools, are shutting down valuable capacity, and incompetently driving their companies into the ground, guided by the idea of adding a few extra pennies increase to the company's stock price or dividends. Often, the executive's compensation level is tied to the company stock price or other similar targets. Moreover, for this history of incompetence, the auto company stockholders reward the executives with higher salaries, bonuses, and stock option plans.
http://www.larouchepub.com/other/2005/3234auto_execs.html
