Shock! Scandal! Horror! Ousted General Motors Chairman/CEO Rick Wagoner will remain on GM’s payroll for the remainder of 2009 and will be paid his full salary for doing no work, reports the DetN. Out of your tax dollars, no less! So how much will Wagoner earn while not working for GM this year? Oh, right, one American dollar. And because not all of Wagoner’s pension is bankruptcy-proof, keeping him on the salary until December 31, 2009 actually improves the chances he’ll take another big hit to his compensation. Wagoner will receive $68,900 in annual pension payments whether GM goes bankrupt or not, but five additional annual pension payments of $4,523,400 could be wiped out if Chapter 11 occurs before Wagoner takes his first payment at the end of this year. In short, the arc of justice may be long, but it bends towards surrealism. In the form of GM’s $1 per year executive jobs bank. And just to make the whole situation even more bizarre, the DetN notes that Wagoner “cannot work for another automaker without GM’s written permission.” Because I’m sure he’s got the headhunters beating down his door.
This move strikes me as rather snippy.
His pension will not turn the tide.
Bunter
Snippy is what TTAC is all about when it comes to Red Ink Rick.
Snippy is being kind to him. What he’s doing strikes me as a vindictive act, ie., “oh, so you’ll effectively fire me? Fine, I’ll play things by the book and continue to milk GM for every last dime I can. Consequences? To quote Daffy Duck from Ali Baba Bunny ‘Consequences, shmonsequences, as long as I’m rich.”
Over here in CAW LALA land the CAW employees receive 3 years of unemployment benefits. First year is unemployment and SUB, the next year the company pays them not to work and the third year they requalify for SUB and unemployment. Good deal if you can get it. Non CAW member taxpayers will be charged with fraud for doing the same thing.
Non CAW member taxpayers will be charged with fraud for doing the same thing.
That would be because they didn’t sign a contract. If they did, then they’d be entitled to similar benefits. I’ve got nothing nearly so rich (as either Wagoner or that of a senior line-worker), but I have some severance rules written into my contract, as do most employees. Do you want to live in the kind of libertarian paradise where contractual obligations are either ignored or nonexistent?
It takes two to tango, and GM et al didn’t have to sign such a deal. They did, of course, because it was easy and, at the time, affordable. But they didn’t have to sign it. Other CAW shops (I’ve worked at two) have played hardball with the union and won, so what’s GM’s problem?
@ bluecon The situation that you describe only kicks in with a plant closure.Just to set the record straight that situation has never happened.
If a worker does not have enoough SUB credits he is fu–ed.
Lets remember sir that not one nickel of the Canadian taxpayers money has been spent on GM
yet.
You mean Tesla hasn’t already made inquiries?
How Fortune foresaw a GM bankruptcy-
http://money.cnn.com/2009/04/01/news/companies/loomis_gm.fortune/index.htm?postversion=2009040117
“I then wrote the words you see on the cover at right, in the issue of Fortune containing “The Tragedy of General Motors” (Feb. 20, 2006). “The evidence points, with increasing certitude, to bankruptcy. ‘I know that things will turn around,’ says Rick Wagoner, GM’s chairman and CEO. But he cannot know that. And deep down, he may not even believe it.”
2006? Our fearless leader started banging the gong in 2004.
I thought he resigned.
How do you join the jobs bank when you quit?
GM oughtta pay RiR and Lutz’ pensions in Buicks… kills two birds by clearing out excess inventory, and lets GM count these as “sales” (which would still drop off a cliff).
Diane Francis has some revealing observations on Wagoner’s sudden departure and Obama’s Hypocrisy.
Francis is the Editor-at-Large of the National Post, an experienced financial journalist, a broadcaster, the author of eight best-selling books, and a sought-after speaker.
So if Chapter 11 sets in before the end of the year Rick is out 18 million bucks. Bring on chapter 11–he doesn’t need nor deserve the pension.
Robert-
Oh, I know, I was here back then. But when even Fortune magazine has been saying GM don’t have a prayer and it is Wagoner’s fault for three years there really is no hope.
@Colinpolyps
No. His pension is 100% bankruptcy proof. He gets the money regardless of the shape GM is in.
You should also be careful with your second statement that he doesn’t deserve his pension; even though he was a generally crappy executive, the fact still remains that he’s worked at GM his entire working life entitles him to that pension. If you were in his position, you’d definitely take issue with people stating that somehow you don’t deserve your pension after decades of service.
@Mikey
Just to set the record straight I know people that are just running out of their third year of collecting these benefits. Yep they have been off work for nearly three years and are collecting benefits confiscated from the taxpayers.
And the taxpayer just handed GM millions to revamp the Oshawa plant. The government has sunk plenty in these money pits.
@Pars
No you cannot get the same deal as the CAW. The CAW has special rules unavailable to the regular old taxpayer setup by the government and payed for with other peoples money.
I’ll give $100 for a photo of Rick sitting in a GM cafeteria in his $2,000 suit playing cards with the UAW members while he rides out his “jobs bank” assignment………….
bluecon.With all due respect sir,I got to question these facts.3 years would take us back to 2006.Nobody,and I mean nobody has been layed off for that long.The lowest of low seniority people/would be Perigrine/Access people,hired in early 2005.All of them would have been called back
during the summers of 06,07 and some of 08.If any body tells you they have been layed off from GM Oshawa for 3 years,without being called back ever.I would have to say they were little careless with the truth.The union rep I Talked to 1/2 an hour ago gave me a whole different iterpration of you original comment.In keeping within the rules of TTAC,suffice to say your comment is inacurate.
Gee grog, I think TTAC has always given RiR the honor of a full frontal attack.
Anyway…I have called for his head for several years too, but seeing the BoB do this when they are the ones responsible for his being there so long…that’s snippy IMNSHO.
Vindictiveness only discredits those who buy into it, not their objects of derision.
Playing games with his contract is silly and lame. The money will keep the lights on how long?
Ricks gone. Too little, too late. Move on people.
Bunter
Pensions are not nearly as important when you’ve been pulling down 10-15 million a year.
Unless he showers in Crystal or something, he’ll be ok.
Americans gotta be the biggest suckers that ever sucked. Say what you will about “old Europe”, but a torch wielding peasantry would have gone after their tormentors years ago.
I know TTAC is supposed to be all about trashing GM whether they do good or bad but even for TTAC this is kind of a mean-spirited post. Someone needed to call this one out i’m afraid…
I’m sure Rabid Rick has a little stuffed away in Swiss banks or the Cayman Islands. We don’t need a charity benefit just yet.
@ mikey
I said CAW not GM Oshawa. There are people laid off from Ford in Windsor that will soon have their 3 years of collecting unemployment benefits end.
There is nothing in my post that is innacurate.
If there is please point it out.
The thing that troubles me is why contracts are treated differently.
Yes, GM signed a contract with RiR for his pension package.
But GM also signed a contract with secured bond holders and promised to repay that debt in full.
Now that GM is insolvent and in effect unable to honor either contract. Shouldn’t RiR’s package be treated as a GM debt and thus reduced to the same percentage as other debts, and/or swap for equity?