Sign in to follow this  
Followers 0
NINETY EIGHT REGENCY

GM to remain under pay czar beyond debt payoff

10 posts in this topic

GM to remain under pay czar beyond debt payoff

01/25/2010, 3:46 PMBY MARK KLEIS

Throughout the bankruptcy and restructuring process of GM, the Treasury Department has played a supervisor role for the automaker. The Treasury Department was in charge of monitoring pay within GM during the restructuring process, due to the government funding given to the ailing automaker.

Currently, Ken Feinberg, who is the government’s pay czar, is responsible for monitoring and approving the pay for the top 25 executives at GM, Chrysler Group LLC, Chrysler Financial, GMAC Inc. and three major banks, according to The Detroit News.

Ron Bloom, who fills the role of auto adviser for the Obama Administration, says that GM will not escape government-imposed pay caps simply because they pay back the government loans. Bloom went on to say that at this time it is not clear when the government will stop overseeing pay at GM.

“It’s good news for taxpayers and good news for the company,” said Bloom.

“GM has $13.4 billion in unused taxpayer funds in escrow. The Treasury Department could have given GM until June 2011 to repay the loans, if it felt GM needed the extra cushion,” said Bloom.

Beyond the taxpayer funds in escrow, and the funds that GM is set to pay off by June, there are additional funds that make up the total bailout of $50.5 billion for GM. The government exchanged $42 billion in bailout loans for stock in GM, resulting in a 60.8 percent controlling interest in GM.

Whether or not the taxpayer will see their money again now rides on the success of the automaker. If GM succeeds, the government could in theory recoup most, if not all of its investment in GM.

The Detroit News says that according to some oversight panel estimates, taxpayers could still lose $20 billion or more due to the GM bailout.

link:

http://www.leftlanenews.com/gm-to-remain-under-pay-czar-beyond-debt-payoff.html

0

Share this post


Link to post
Share on other sites

Considering after they pay back the loans they are still owned by the US Treasury I don't see this as surprising...

0

Share this post


Link to post
Share on other sites

The Treasury will have a stake in GM for many years. New GM stock has not even been issued yet, and until the government makes a return on the equities it purchased, they will continue to oversee pay at GM. I don't blame them for it...they are simply looking out for their investment.

0

Share this post


Link to post
Share on other sites

The Treasury will have a stake in GM for many years. New GM stock has not even been issued yet, and until the government makes a return on the equities it purchased, they will continue to oversee pay at GM. I don't blame them for it...they are simply looking out for their investment.

assuming it's legal... ;)

0

Share this post


Link to post
Share on other sites

Once GM pays of the loan the Goverment needs to be hands off! Same with any other private sector company or institution.

I would rather see the goverment spend their time fixing the economy before higher inflation rates takes over from their first actions. As of yet they still have a lot of work to do and just printing money is not going to solve it.

0

Share this post


Link to post
Share on other sites

Whitacre should look crosstown to fix arrogant culture

January 25, 2010 - 10:55 am ET

24 commentsRecommend (7) Related Stories

Whitacre tightens grip on GM as CEO, endorses top managers

If Ed Whitacre wants to become General Motors' first thoroughly successful chief executive in a couple of generations, he ought to study the outsiders who are leading his crosstown rivals.

At both Ford Motor Co. and Chrysler, dynamic leaders are making all the people at these large organizations row in the same direction. That's hard at GM, whose insular culture still prompts people to act, despite GM's well-documented failure, as though they're the smartest people in the room, with nothing to learn from outside.

Bankruptcy did not cleanse GM of arrogance.

Whitacre needs to figure out how to improve that culture.

Alan Mulally came in from Boeing. In his aw-shucks, country-boy way he pushed a sclerotic Ford in one clear direction. Mulally has few and grand ideas, and that's what it takes for a CEO.

Like a mantra, his principles are repeated over and over within Ford:

• Be one global Ford, which doesn't do repetitive engineering and design all around the world;

• Emphasize the Ford blue-oval brand, and don't get caught up in small, extraneous businesses;

• Emphasize fuel efficiency and a full lineup from small cars to crossovers;

• Bring technology affordably to the masses; and

• Communicate that it's working.

At Chrysler, the overwhelming force of Sergio Marchionne's intense intellect and stunning, monk-like workaholism has whipped the organization into a rowing team. Everybody knows the challenge, and everybody is pulling together.

After the catastrophe of DaimlerChrysler and the absentee incompetence of Cerberus ownership, Chrysler folks are so happy to know that a powerful adult is in charge that they're happy to follow Marchionne into crazy-long work weeks.

GM has tremendous technical capability, and lots of good people. Under Vice Chairman Bob Lutz, now Whitacre's adviser, GM became more global and developed first-class vehicles.

Ed Whitacre's challenge is not to specify future cars or advertising campaigns or even to reorganize the engineering organization. It's to develop a sense of humility within GM that allows the organization to hear what consumers want.

GM needs a learning culture, and needs to treat its suppliers, dealers and consumers with a lot more respect.

0

Share this post


Link to post
Share on other sites
Once GM pays of the loan the Goverment needs to be hands off! Same with any other private sector company or institution.

I would rather see the goverment spend their time fixing the economy before higher inflation rates takes over from their first actions. As of yet they still have a lot of work to do and just printing money is not going to solve it.

Higher inflation will come not only because of money being pumped into the economy, but the US will be importing inflation as foreign goods become more expensive due to the dollar adjusting to a fair (i.e., lower) value. Your problem is much more in your external accounts balance than in your budget deficits: maintaining a false sense of security and power of a strong dollar while slowly selling off American assets to China and other emerging economies was never a problem for people in Washington, and I suspect it still isn't.

Re the money (more than the loans), once GM pays the loan portion the US Treasury will likely still be the majority owner in New GM, so they have every right to can call shots on such matters: remember that the bailout money is your money as well as you pay taxes in the US, so I'd say that ideological considerations aside, it is also in your interest for GM not to pay fatcat salaries unless the company proves itself profitable and viable.

I think that if people want the US Government's hands off GM, then you should collectively pressure your Representatives/Senators in the US Congress.

Edited by ZL-1
0

Share this post


Link to post
Share on other sites

Higher inflation will come not only because of money being pumped into the economy, but the US will be importing inflation as foreign goods become more expensive due to the dollar adjusting to a fair (i.e., lower) value. Your problem is much more in your external accounts balance than in your budget deficits: maintaining a false sense of security and power of a strong dollar while slowly selling off American assets to China and other emerging economies was never a problem for people in Washington, and I suspect it still isn't.

Re the money (more than the loans), once GM pays the loan portion the US Treasury will likely still be the majority owner in New GM, so they have every right to can call shots on such matters: remember that the bailout money is your money as well as you pay taxes in the US, so I'd say that ideological considerations aside, it is also in your interest for GM not to pay fatcat salaries unless the company proves itself profitable and viable.

I think that if people want the US Government's hands off GM, then you should collectively pressure your Representatives/Senators in the US Congress.

I'm sorry I just don't want a goverment running a company that can not even run the county regardess who is in office.

I also don't buy the fat cat lie as the results of less pay will not change a thing. If the goverment wants to cut pay they should start with their own pay in DC. That is my money too!

0

Share this post


Link to post
Share on other sites
I'm sorry I just don't want a goverment running a company that can not even run the county regardess who is in office.

I also don't buy the fat cat lie as the results of less pay will not change a thing. If the goverment wants to cut pay they should start with their own pay in DC. That is my money too!

Don't want to cross a line with board rules and get political, but... if that is the case then start intervening in the political process as much as a citizen can. Politicians do what they do because people just stopped caring stopped challenging them and stopped asking questions. Most don't even bother to vote... there is no Democracy without the common man participating in the political process even if it is by asking questions to the elected officials and voting instead. Sorry, this is not directed at you in particular, it's just a trend I see in Democracies everywhere, from the US to here in Portugal and the whole of Western Europe... It bugs the Hell out of me... again, not directed at you as taking a shot at you, your comment just made me think about it.

0

Share this post


Link to post
Share on other sites

Don't want to cross a line with board rules and get political, but... if that is the case then start intervening in the political process as much as a citizen can. Politicians do what they do because people just stopped caring stopped challenging them and stopped asking questions. Most don't even bother to vote... there is no Democracy without the common man participating in the political process even if it is by asking questions to the elected officials and voting instead. Sorry, this is not directed at you in particular, it's just a trend I see in Democracies everywhere, from the US to here in Portugal and the whole of Western Europe... It bugs the Hell out of me... again, not directed at you as taking a shot at you, your comment just made me think about it.

No I agree in most respects. I just see it this way. The goverment is like a corperation and we are the stock holders. Just as GM will have share holders once they start selling stock.

The point I see if that it is up to us to hold the goverment accountable just as the share holders of a company to hold it responsible. If either fail to do so they are held responsible for those in power.

The fact is the people of this country elect people they know nothing about and buy stock in companies that they have no clue about.

I think we are now seeing a fair change in both goverments and companies because people are now waking up to what is really going on and they don't like it. This is not partisan anymore as people rightly on both sides of the issues business and Goverment are very unhappy.

Edited by hyperv6
0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

Sign in to follow this  
Followers 0