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NPR’s Steve Inskeep: “You have no intent, and, in fact, not even the ability to remain major shareholders of two major auto companies?”
UAW President Ron Gettelfinger: “That’s correct. We do not have the ability because of the need for the cash in the VEBA.”
Inskeep: “Are you optimistic that Chrysler is going to emerge from bankruptcy in a long-term viable form?
Gettelfinger: “First of all, we did everything we possibly could to keep Chrysler from filing for bankruptcy. We did our part, and we’re not responsible for them being in bankruptcy . . . ”
Welcome to the new Chrysler ownership. And unlike Cerberus they’re not even pretending they’re in it for the long haul. But to whom will they sell? Listen to the whole story here.
(Via AP/Google)
Deb Price, Detroit News: Thank you, Mr. President. On the domestic auto industry, have you determined that bankruptcy is the only option to restructure Chrysler? And do you believe that the deep cuts in plant closings that were outlined this week by General Motors are sufficient?
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.
April Fools’ Day is a dangerous proposition in this day and age. I mean, where does the media get off giving people the license to turn everything into a joke when just about everything is one giant joke anyway? Oh well. Post-post-post-irony’s gotta have its day in the sun too. And with that in mind, let’s set a course for the joke-or-not heart of darkness: The Detroit Free Press. The Freep is running wild with its license to giggle today, loudly proclaiming GM’s new CEO Fritz Henderson’s ability to, like, fix stuff. So is this good news for folks stuck with malfunctioning GM transmissions? Or does Fritz The Fixer just know a guy who knows a guy? No, apparently the big difference between Wagoner and Henderson is that “where Wagoner, 56, often spoke in sentence fragments that strung several thoughts together, Henderson’s answers are more direct, his speech more clipped.” Oh, yes, and “when GM defused a potentially explosive standoff between the UAW and parts-maker Delphi Corp. in 2007, union President Ron Gettelfinger singled out Henderson as the peacemaker.” So he’s a short talker that makes nice with the union. Sounds like a fixer (-upper) to us. Funny stuff, Freep.
ABC News reports that outgoing GM CEO Rick Wagoner will walk away with a $20.2 million retirement package, not including the usual perks bestowed upon The General’s generals (e.g., free air travel, secretarial services, cars for life, etc.). Also standard: Wagoner’s pension is insured. In other words, if/when GM eventually files for Chapter 11 protections, even if the company ends up in liquidation, Wagoner’s pension is safe. And as the money is not a “bonus,” it can’t be stopped by the federales. In an email to ABC, GM spokeswoman Julie M. Gibson pointed out that it’s actually only $5M or so paid out over five years. (It’s my money and I want it now!) In a subsequent “clarification,” Gibson said the terms of Wagoner’s final compensation were not yet hammered out. “Specifics on any compensation entitled to, or actually paid to Mr. Wagoner are still being reviewed.” Could that mean he actually INCREASED his pay-out to piss off? Anyway, if Rick decides to take GM to court, guess who pays for the lawyer? Not that he can’t afford one: Wagoner’s already banked over $60,000,000 in salary. As for the value of Wagoner’s stock options, well, I guess there is some justice in the world.
The Freep reports that UAW president Ron Gettelfinger will not seek re-election when his term expires in 2010. The move is not unexpected as the UAW traditionally does not allow re-elections after candidates reach the age of 65. Gettelfinger will continue to lead the UAW negotiations with the Detroit automakers through the union’s conference in June 2010. “The minute that’s over, I’m done,” says Gettelfinger. And his timing looks to be impeccable (given the situation, natch). Though Gettelfinger oversaw the 2007 labor negotiations which introduced VEBA and two-tier wages, UAW wages will not reach parity with the transplants until 2011 at the soonest. Which means Gettelfinger will not technically be in charge at the exact moment the UAW officially ceases to have any relevance.
The Freep’s Carol Cain has gone one better on the crazies who suggested that Steve Jobs should take over Detroit, nominating Oprah Winfrey to become Detroit’s cheerleader-in-chief. Noting calls from Senators for GM to declare bankruptcy and falling public support for the Detroit bailout, Cain suggests that desperate times call for desperate gimmicks. “I don’t know what kind of vehicle Oprah owns or if she even drives. I don’t know what she thinks about the auto industry or if she could be convinced to help. I know she likely wouldn’t be in this for the money, glory or stature,” writes Cain. But, “perhaps someone could appeal to her sense of patriotism in helping this industry that has been the bedrock of our nation for generations. Like many Americans, perhaps some family member worked in one of the auto factories. The industry still has dramatic impact on all 50 states and many livelihoods are impacted by it.” And hey, she has experience giving away cars!
Please. Don’t get to worrying about Rick Wagoner’s finances. First of all, Rick still made $5.4 million in ’08, the year that GM threw itself at the mercy of the US taxpayer (in their own arrogant, extortionist kinda way). And, as we reported some three years ago, GM’s CEO has a bankruptcy-proof pension. So when the artist formerly known as the world’s largest automaker finally sinks into the abyss of its own making, Rick’s OK. That’s assuming Wagoner hasn’t pissed away the $100 million+ he’s banked since ascending to the top rungs of the only company for which he’s ever worked. Meanwhile, in any case, what’s wrong with this juxtaposition [via Bloomberg]: “Wagoner’s [2007] compensation included a salary of $2.1 million and he wasn’t paid a bonus, the Detroit-based automaker said in a regulatory filing today. The largest U.S. automaker lost $30.9 billion last year, the second biggest shortfall in the company’s 100-year history.” Verecundia afflictus.
In Peter DeLorenzo’s last column, the self-styled AutoExtremist prescribed nichedom as an “elixir” for Pontiac. Reader reaction was so positive (apparently) that Sweet Pete has jumped off the deep end. People love the “excitement brand, whether it be for nostalgia reasons or because the attitude and spirit exemplified by Pontiac in its heyday.” In short, for nostalgia reasons. “But,” reckons DeLorenzo, “warm feelings of nostalgia won’t be enough to save Pontiac – or GM, for that matter.” Fast forward through some vintage bashing of “grim-reaping, hand-wringing, self-flagellating purveyors of doom in California and Washington,” and other “green-tinged” coastal elites, and what does DeLorenzo prescribe for the broken brand? Yup, “warm feelings of nostalgia.” Specifically, the return of the Firebird Trans-Am. The screaming chicken. Strap on the mullet, folks, this is going to get interesting.
Shortly after Transportation Secretary Ray LaHood expressed his enthusiasm for a nationwide pay-per-mile tax scheme, the White House reacted by denying any plans for the car-monitoring fee system. “[Pay-per-mile] is not and will not be the policy of the Obama administration,” White House press secretary Robert Gibbs told the WaPo at a press conference, kicking off a merry little game of gotcha. “So was Secretary LaHood speaking out of turn here?” an AP reporter asked at the briefing. “I would direct you to Secretary LaHood on that,” Gibbs said. “Well, we actually interviewed him,” the reporter noted. “Well, call him back,” Gibbs said. Transportation Department officials later “clarified” that LaHood’s comments “were part of a long interview about a range of transportation issues and that he never specifically advocated taxing drivers by the mile.” Well that clears everything up now, doesn’t it?
Jerry Flint in his latest Forbes columm:
Layoffs, product cancellations and product postponements in America’s once great auto industry are way beyond cutting into fat. ‘Amputation’ is a better description. Even as the government spends billions to save the American manufacturers—with billions more aid to come—it is fair to ask if there will be anything left to save.
Despite generously admitting that “Chrysler may survive,” Flint believes the Pentastar has far better chances under Marchionne’s Fiat than under Feinberg’s Cerberus. Not because Americans will fall madly in love with Italian cars, but because “Chrysler has thinned its employee ranks so severely that it probably cannot create new cars on its own.” And it’s a trend that Flint is seeing across the industry.
The Wall Street Journal is reporting that Steven “Steve” Rattner of Quadrangle Group will join the Presidential Task Force on Autos as an advisor to National Economic Council Director Lawrence Summers. Rattner has no publicly-known experience in the automotive industry, although as a former newspaper man and print media investor, he surely knows a thing or two about dying industries. Anyway, as we reported earlier, Rattner’s major qualification for the position (he was previously being considered for “car czar” before that position was merged into the PTFA) appears to be that he’s a major Obama fundraiser, and is married to the finance chair of the Democratic National Committee.
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