While Wall Street investment banks and other financial firms make headlines for the millions paid out to certain executives, more modest bonuses go to workers from human resources representatives to secretaries as well as employees who actually made money for their companies last year.There's an implied sneer in that, at "workers from human resources representatives to secretaries" as people who don't make money for their companies. But let's turn it around... Let's say, "Even in the financial industry it's okay to give bonuses to the employees who made money for their companies last year... but do we need more than one hand to count them?"
Jason Weisberg, vice president of the Wall Street brokerage Seaport Securities, said bank employees count on performance bonuses like salesmen count on commissions.Salesmen count on commissions from their sales. If they don't make sales, believe it or not, they don't get commissions. Similarly, if we're going to refer to "performance bonuses", they perhaps should be somehow related to... performance?
"What are you supposed to pay them?" Weisberg asked. "Or are you not supposed to pay them?
And if you don't pay them, how do you expect that employee to stay employed at that company?"Well, if they're not performing... do you really care? And with financial industry employer's shedding employees like leaves, odds are that only those employees who actually performed will be marketable - and their performance bonuses are defensible.
"The reality is good people will always be able to get a job someplace else if they are unhappy," Hall said. "So do you want to own stock in a company that is filled with people who can't get a job anywhere else?"You mean, the "good people" who lost hundreds of billions of dollars, and caused the value of my stock to plummet to the point that the only reason it has any value is... not even the bailout money it has already received, as that hasn't fixed things, but the expectation that hundreds of billions in additional taxpayer dollars are on the way? No, I don't want stock in that company, but it's not because I'm concerned that the "good people" might leave.... Stock in the company that's doing well enough to poach them, on the other hand....
"You could absolutely make an argument that we shouldn't be getting any bonuses this year," said the worker, who also requested anonymity because of his company's restrictions on talking to the media.It's only the guy who speaks out against bonuses, it seems, who "can't" use his name.
"If you are going to have a pay-for-performance system, you have to take the lows with the highs," he said. "This just happened to be a really low year."
Accountability for Any Prior Handounts - If the bank has received a prior infusion of bailout funds, it must provide a full accounting of the use of the funds;
An Honest Balance Sheet - Any banks who want handouts must present an honest assessment of any troubled / toxic holdings they possess, with bailout money being directed based on need. If a bank wants to pretend that its toxic holdings are worth 80 - 90 cents on the dollar (or more), we are equally entitled to pretend that they're telling the truth and that the don't need our money;
A Business Plan - Require a clear statement from the bank of how it got into this mess, and precisely how the cash it requested will help it get out.
An Insolvency Plan - In case it gets the funds and still can't get its act together, a plan for how it will enter Chapter 11 proceedings, or how it will otherwise facilitate the FDIC in arranging its takeover by another bank.
A song about a habitual appeaser for a man who will say anything to get elected, even if he said something completely different fifteen seconds earlier. The song is about how appeasement leads to failure, and I suspect that it will prove to be on the mark.You remember Mitt Romney - the guy who got rich as a corporate raider, trading in no small part on his daddy's name and connections, became governor in Massachusetts, despite being a Republican professed a wide range of beliefs better associated with liberalism, passed a bunch of expensive legislation, and skipped town to run for President before his popularity might be tarnished by its cost. Oh, you can find more flattering biographies, even hagiographies, I'm sure... But from what I saw of the man running for President, I can't see how they're deserved. Oh, I know, his defenders say he never got a chance to "introduce himself", but... why are we still waiting for this mythic figure to step forward and fill the shoes of the doppleganger we have met?
Oh yeah, you do what they tell you to do,Not quite a year ago, when campaigning in Michigan, Mitt had this to say:
You say what you say,
You try to be everything to everyone...
“If we are going to be the world’s greatest economic power, we must invest in our future. It’s time to be bold.” He continued, “First, I will make a five-fold increase – from $4 billion dollars to $20 billion dollars – in our national investment in energy research, fuel technology, materials science, and automotive technology.”In addition to offering to throw as much as $20 billion at the auto industry, Romney took a decidedly anti-environmentalist, anti-conservationist stance, but seemed to stand squarely behind the CEO's of the Big Three with no doubt about their ability to lead the transformation of the auto industry:
He said Washington has to invest in Michigan and not just bemoan the high unemployment rate and failing economy:
“Look how industries in other states have thrived from the spin out of technologies from our investment in these areas. So if we can invest in health care, in defense, and in space, why not also invest in energy and fuel technology here in Michigan?”
In a veiled attack on his rival here, he said that Washington is pessimistic about jobs coming back to Michigan, something John McCain has said previously, but has backed away from in the days before the primary:
“Washington politicians look at Michigan and see a rust belt. But the real rust is in Washington.” The former Massachusetts governor continued, “The pessimist will point to an empty factory and a laid off worker and say they have no future. Instead, I see a vital infrastructure, a skilled workforce, and an innovative spirit all worthy of an optimistic vision and deserving of a leader who will work tirelessly to deliver the power and potential of Michigan and the American people.”
He criticized Mr. McCain for backing a bill that would have pushed to cap and trade greenhouse gas emissions, which Mr. Romney called a "job killer." And he promised to bring representatives from the automotive industry, unions, Congress, and the state of Michigan together in his first 100 to come up with a plan to "rebuild America's automotive leadership."He unabashedly courted the union vote:
"I'm committed to fighting for every good job in this country and Michigan and across the country, and that connection I have to the state is just enough to help bring people who are normally thinking to vote toward the Democratic side to vote for me," he said.When John McCain offered some genuine straight talk, that there had been a significant loss of manufacturing jobs in Michigan and "some of those jobs aren't coming back", Romney jumped down his throat:
Mr. Romney seized on Mr. McCain's "straight talk" as an example of Washington's pessimism and indifference to Detroit.But remember, that wasn't the real Mitt Romney - we hadn't been introduced to him at that point.
"A lot of Washington politicians are aware of Michigan's pain, but they haven't done anything about it," Mr. Romney said. "There are some people who don't think there's a future for the domestic automobile industry. They think the industry and its jobs are gone forever. They are wrong."
You know all the right people,Now, unbelievably, it appears that Mitt Romney is trying to position himself as the heir to the Republican Party. This puts him in a rarefied league presently otherwise composed of Sarah Palin and, yes, Newt Gingrich. So what does Mr. Appeaser do when confronted with a crisis in the auto industry, and finds the leadership of his party suggesting that good manufacturing jobs are gone forever, don't have any concern for Michigan's pain, and have even less desire to do something about it? People he says are "wrong"? Did he hold true to his promise to bring the auto executives together to forge a new path for the industry? You guessed it - he's arguing that we should Let Detroit Go Bankrupt....
You play all the right games,
You always try to be everything to everyone...
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.Break the union and fire the management teams for the Big Three? He's not making a policy statement - he's pandering to a faction of the Republican Party that sees little value in maintaining an American industrial base, and sees union busting as a leading civic virtue. As Motor Trend puts it,
* * *
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
"The financial straits that the Big Three find themselves in is not the product of our current economic downturn," harrumphed Senator Richard Shelby, senior Republican on the Banking Committee in a written statement, "but instead is the legacy of its manufacturing and labor force."We knew all along that Mitt was most at home in the banking and finance industries; he's apparently now out to prove that, with all of his claims of inherited wisdom about autos, he's not just another anti-manufacturing, anti-union Republican, he's ready to be their leader.
Well, yes, GM and Ford Motor Company haven't posted profits for years. And Chrysler, shielded first by Daimler and now Cerberus, is in worse shape. Cerberus has finally dropped the ruse that it's in the car business for the long-term.
Most of us would love just a portion of the UAW's health care benefits. But Shelby is typical of so many of our leaders who don't care about manufacturing, let alone automobile manufacturing. He's senior Republican of the Senate Banking Committee, after all.
Please excuse the following redundancy, but I can't emphasize it enough: making cars and trucks takes loads of time and money.
If you work for, or with, the banking or finance industries, you might someday come to realize this (as Cerberus has), but you won't like it. Wall Street, and much of Capitol Hill, likes "industry" to make "financial products," computer software and websites, things that can be made out of thin air or by college grads who don't ask for health benefits. Ask New York Times Pulitzer winner Thomas Friedman, who apparently believes Steve Jobs could have a Chevy iCar on the road in a year if the Apple chief took over GM.
I think you like to be their simple toy,As Motor Trend notes, even those most sympathetic to the auto industry are anticipating significant structural changes, plant closures and union concessions, in all likelihood including the resignation of GM's CEO.
I think you like to be their clown....
But while many Republicans see the fall of Detroit as just reward for the UAW, Democrats in Congress are ready to impose sacrifice on the UAW as well as automakers, in exchange for loan guarantees. Congressman [Elijah] Cummings [(D-MD)]... told MSNBC he supports bailing out GM, Ford and Chrysler, but that the automakers "may have to change union contracts."The problem here isn't that Romney has pulled yet another of his flip-flops - his abdications of everything he once supposedly stood for in the name of advancing himself politically. If you've watched Romney at all, you know that the man (again, doppleganger Romney, as we haven't yet met the real one) will say and do anything to advance himself, even if it means repudiating what he professed only minutes before to be his deepest and most heart-felt beliefs. The problem isn't that he's calling for serious reforms by the beneficiaries of federal aid before it's granted (not that he's in favor of granting it... today). It's not that he's stupid. Perhaps it's the opposite. The man has an above-average mind, yet he spews nonsense that betrays either that he's fundamentally ignorant of his area of supposed expertise, or that he's lying.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.Oh, you mean like, to a substantial degree, what they've already done? If I assumed Romney to be an idiot, his ignorance might be excusable, but he's not an idiot. Also, just because the process of shifting responsibility for retiree benefits and pensions from the Big Three onto the unions isn't yet complete doesn't mean it's not well underway. Does he truly not know this, or is he lying?
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.This man has been in business? Truly? If we accept his figure, he believes that costs are fixed per vehicle, such that you should assign the same labor cost to a subcompact sedan as you would assign to a luxury SUV? With no consideration of actual cost or plant efficiency? He doesn't understand that the Big Three aren't building vehicles using $2,000 less in materials per car - they don't build cars for less, which is why on a per vehicle basis they lose money on those sales. As somebody who supposedly knows about business, if he truly believes that the Big Three are producing competitive products with better paid labor for $2,000 less per vehicle, why isn't he championing their management (like he used to) instead of calling for a decapitation?
Second, management as is must go. New faces should be recruited from unrelated industries - from companies widely respected for excellence in marketing, innovation, creativity and labor relations.That's great idea! Ford should bring in a CEO from a company like Boeing! Oh... They did that? Then Chrysler should get taken over by a covey of Romney-style corporate raiders who can take it private, clean house and... Oh... They did that? Beyond that, did Romney fail to notice, growing up, that his Daddy rose to be CEO of AMC by virtue of his years of experience within the auto industry? Is his present contempt for industry experience, if not feigned, some sort of Oedipal thing? Really, assuming that it's dead wrong to use executives who are experienced with an industry to run or revive that industry, whence Romney's "magic men" from the outside who will achieve a 21st century transformation? According to Romney, after all, Cerberus couldn't find one, and their financial wizards are paying tens of millions in bonuses to hang on to the "failed" team they have in place.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”Wait a minute... so forty or fifty years ago his father, either on his way to being or already installed as CEO of AMC, discussed these crucial issues with the head of the UAW, the UAW guy described them as being on an unsustainable path and... daddy squandered the opportunity? Seriously, what am I supposed to make of this anecdote?
Get rid of the planes, the executive dining rooms - all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.Where's Romney's similar call for sacrifice by the financial industry? No more executive dining rooms, corporate jets and the like, until the economy's back on track? There's unquestionably a culture of overcompensation among this nation's executive class, but it's silly to use the issue to attack the auto industry or to pretend that it is somehow unique. Assuming that it truly has ended its post-collapse luxury junkets, has AIG shuttered its executive dining room and grounded its corporate jets? Where's Romney's lament? Scheduling conflicts excluded, has Mitt himself ever declined a ride on a corporate jet or a free dinner in an executive dining room?
The gibberish about needing to pay that much just to keep superstars from fleeing to private-equity firms or hedge funds is just another Wall Street myth. The truth is most of them are lucky to have a job at all and they know it.Within the finance industry, this has translated into compensation disproportionate not only to performance, but to the value of work performed - "compensation has historically consumed half or more of every dollar of revenue generated on Wall Street".
