Employee Discount

by Administrator 30. June 2005 19:06

Milwaukee MVP Sean McCormack posted an article regarding GM's employee discount plan on their cars right now. He makes the point that if they can make a profit, they've really been "sucking us dry for years"; I agree with him, but let me go further and add my 2 cents.

Worse than "sucking us dry for years" is Sucking us Dry for Years and Still being in financial trouble. If they are able to keep the lights on at these prices, it makes it look (to me anyway) as though they could have ran a lean ship all along and not be where they are now. In many ways, I blame this on the "Executive Caste" that has evolved in this country. Executive compensation in many of our largest companies has never been more decoupled from their companies' performance. (At least someone is achieving a high degree of decoupling...) Money magazine has a regular special on this unexplainable and purely American phenomenon. My favorite example from Money is a couple of years old: In a year when the company's revenues plunged 40%, the CEO of Home Depot was awarded a coupe of hundred million dollars in bonus options and cash. Huh? What exactly did this individual do that year to deserve more than their normal salary? The current Ford and GM CEOs are trying to correct many years of their predecessors' carelessness.

Like many issues, I attribute this to "The Population" being uninformed and not caring anyway. C-level (not sea level) executives have been the subject of Hero-Worship ever since Lee Iacocca "saved" Chysler. Did people fail to see that this deliverance came in the form of a gift from Uncle Sam of Billions of taxpayer's money? Can this be in GM's future? I hope not. As much as GM is an American icon, I'd rather not pay for it. Companies need to realize that we may not come to their rescue if they are this careless. The jobs are important, sure, but then again I'm not a big fan of the UAW either. I'd better withhold my union comments and stop it here.

Maybe I'll go buy a Saab...

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Comments (2) -

optionsScalper

6/30/2005 7:58:05 PM #

Damon,

Everyone is in rant mode in Milwaukee.  Its gotta be the water.  I'm still sick and in a foul mood.  So today, since I'm thinking at about 4%, I agree with you (just kidding, I'd have to be at 2%; seriously, just funnin').

But your decoupling comment is hilarious.  This is likely because the common executive is unencumbered by OO knowledge.  "Unexplainable" from Money magazine?  If the staff at Money could explain anything remotely related to money (cabbage, moola, scratch, coin, bread, jack, etc.  see www.jjbresearch.org/.../TheRiskOfSpeculating.aspx), I'd be surprised.  Executives take money because there is no one to tell them no.

Witness Richard Scrushy being acquitted on all counts yesterday.  So now that he is "innocent" of 36 counts of fraud totaling $2.7 billion, he wants his old job back at HealthSouth.  The only things that is decoupled about this guy are sense and ethics.  He's probably mumbling to himself, "I didn't get enough the first time around, so I'll see if they'll let me back in to take some more."

---O

p.s. All executive really add value well beyond any compensation package that they are awarded.

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