Monday, November 24, 2008

Detroit’s Big Three Asking for Handouts

CEO of the Detroit Big Three (General Motors, Ford, Chrysler), together with the president of the United Auto Workers, flew to Washington D.C. recently. There appeared in the Congress where they demanded bailout amounted to at least $25 billion.

In my MBA study, one of the subjects is Business and Professional Ethics. Now, I wonder if Detroit knows what business ethics are.

Consider these:

  • The CEO of the three auto companies and the Union chief were flown to Washington in separate, corporate planes.
  • Ford alone maintains 8 corporate jets.
  • Workers of GM, Ford and Chrysler make more than $70 per hour in combined wages and benefits, vs. around $40 for their counterparts in rival Toyota’s plants in America.
  • When Congress members asked the CEO of the companies to limit their own salaries to $1 million a year, only one (Chrysler CEO Robert Nardelli) agreed. GM’s Wagoner and Ford’s Mulally sidestepped the question.


Elsewhere, I learn that GM CEO received $15.7 million in compensation last year. [Source] As a comparison, Apple’s CEO Steve Jobs and Google’s CEO Eric Schmidt are paid $1 a year respectively (excluding dividends and other benefits), and you know both companies are doing well.

President-elect Obama has agreed in principle to assist Detroit, but I expect his popularity to dip if the rescue plan is passed in the Congress.


  1. I read in a book that money does not make people evil.

    Instead, it amplifies a person's personalities.

    So a poor but generous person will become a charitable guy when he hits his millions.

    Similarly a poor but selfish person will become a selfish miser, one who is probably more concerned about saving his own a** in the midst of a financial crisis. =p

    Shame shame.

  2. Money to help, sure, why not, but the big three don't even have a plan...

  3. shingo
    Not sure if I can agree with you that 'money does not make people evil'...

    The big three have no plan to change...

  4. In his press conference last night (which we were able to watch live on CNN), US President-elect was saying they were turned away and asked to come back with a plan. They went without a plan. Also, they went there in their own corporate planes which many feel could have been let go off to help the company a bit.

    I believe most poor who become rich would most probably be generous because they've been there to be compassionate enough. My two cents.

  5. How much is Proton's workers make in an hour, I wonder...

  6. Huh? business ethics?
    Make $70 per hour? Steve and Eric paid $1 a year?
    I don't get the whole situation

  7. happysurfer
    Traditionally Republicans are pro-business, while Democrats are pro-workers. Obama is concerned bankruptcy of Detroit will lead to mass layoff.

    You ask a good question! In Mahathir's time, we also subsidize Proton.

    Jobs and Schmidt own stocks. If their companies make money, they receive dividends.

  8. earning 1 million a year! wow.. 15.7 million last year! triple wow! $25 billion, it took my breath away!

  9. not to forget the word demanded!