Bethany McLean and Peter Elkind’s book on the collapse of Enron was sarcastically dubbed The Smartest Guys in the Room. Perhaps if someone pens a novella about the US auto industry, it could be called The Dumbest Guys on the Planet.
Yesterday, the bosses of US automakers, General Motors, Ford and Chrysler, strode cap in hand to Congress to beg for more money to prop up their appalling businesses. Because the automotive industry employ a lot of people/voters (and purchase parts from other business which employ a lot people/voters), politicians have a bad habit of giving them money. That is, politicians take money from taxpayers (everyone else), and give it to automakers. It’s a bit like choosing football teams in the school yard and making the captain select the fat kid first.
Just in case you thought that the automakers maybe deserved one last chance — that it wasn’t really their fault that they have spent the last two decades building cars that people don’t actually want — what do the CEOs do? They fly down from Detroit to Washington in private jets, paid for by the very companies which are begging for taxpayer dollars. Marcus Padley this morning noted the comments of one Committeeman, who stated that:
It’s like seeing a guy show up at the soup kitchen in high-hat and tuxedo…I mean couldn’t you all have downgraded to first class, or jet pooled or something to get here?
I am going to ask the three executives here to raise their hand if they flew here commercial. I’m going to ask you to raise your hand if you’re planning to sell your jet…and fly back commercial.
Let the record show no hands went up.
I’m not an opponent of private flights by any means, but the fact that you flew in on your private jets at the cost of tens of thousands of dollars just for you to make your way to Washington is a bit arrogant before you ask taxpayers for money.
But perhaps we are asking too much of the poor automaker executives. After all, their specialty is enriching themselves, not running a business. Consider that Chrysler not long ago appointed Bob Nardelli as CEO. Before taking the reigns at Chrysler, Nardelli was CEO of Home Depot.
In his last five years as chief of Home Depot, Nardelli collected “some $200 million in salary, bonus, stock, stock options, and other perks. In 2005, Nardelli took home a hefty $38.1 million in total compensation.”
When Nardelli started at Home Depot almost a decade ago, it was trading at around US$50 per share. Last night, it closed at US$18.52. One suspect Nardelli would be hard pressed to get a job anywhere else, other than in Detroit.
Then again, when it comes to executive greed and incompetence, it’s hard to beat the automakers.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.