By on February 15, 2010


Everyone in every business everywhere thinks they are at least somewhat underpaid, and for most, there’s a certain amount of truth to the sentiment. But then, most Americans don’t have jobs that allow them to destroy billions of dollars in value over the course of their careers. Nor does the Detroit News give most of us a forum to whine about our perceived underpayment. Having helped lead GM into bankruptcy and bailout (with thousands of Americans losing their jobs along the way), Bob Lutz still isn’t happy about executive pay limits at GM, and he clearly has no compunction about airing his grievances to the DetN.

What you see is what you get, and it ain’t a lot. All I know is, right now, we are given our responsibility, and given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market. Right now, that isn’t a problem, but over time, clearly a company that undercompensates senior executives is going to have a retention or recruiting problem

Because when GM could afford to shell out tens of millions per year for the best leadership money could buy, they just killed it. Take Lutz’s buddy, former GM CEO Rick Wagoner for example: the guy oversaw a decade of decline and had to be forcibly removed by the Presidential task force… how hard should it have been to retain leadership like that? Based on the blue-chip firms lined up none-deep for his post-GM services, the answer is probably not the $15m or so The General was paying him.

If you are in a situation where your very existence is determined by the largesse of the government, I’m not sure you have a whole lot to say about what your compensation should or shouldn’t be
Until GM pays back the government loans and the Treasury divests its 60 percent stake in the automaker, complaining about executive pay is deeply hypocritical and frankly, pathetic. Taxpayers were told in no uncertain terms that the country needed to sacrifice to save General Motors, and by extension, the whole economy. Competitive compensation didn’t prevent Lutz and Company from reducing GM to begging from taxpayers, and there’s no reason to believe that limited pay from the taxpayer-rescued new GM could inspire even worse performance. If Lutz is unhappy enough with pay limits to attach three superlatives to his description of them, it would be interesting to see how he and the remaining GM insiders do in the job market. Because, for the most part, their performance has been way, way, way below market.
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58 Comments on “Lutz: GM Execs “Way, Way, Way” Underpaid...”


  • avatar
    jaje

    Gotta love Maximum Bob – even in abject failure for so many years he wants more money for him and his buddies. I find it funny he says they have “accountability”…only after our tax dollars are spent to save GM from itself and it’s executives – does any accountability happen (just to fire Wagoner). Now that GM is on it’s own again – same internal, inbred management still running the company on our dime.

    • 0 avatar
      Christy Garwood

      jaje, I am here, on the inside of GM. Ed Whitacre is here now, an outsider, leading the executive leadership. While those executives have longevity with GM, IMO, it is also crystal clear to them that must provide profitable results. I am looking forward to the next public financial statement.

    • 0 avatar
      Facebook User

      Chrissy, if the free market had its way, you’d be out on your ass right now with the rest of the GM failures.

      Perhaps that’s not really relevant to the discussion, but I still think it’s worth pointing out… and it should probably preface any of your pro-Government Motors comments.

    • 0 avatar
      Christy Garwood

      I doubt that, Facebook User. If GM and Chrysler had been allowed to go through BK the normal way and the US Govt, Canadian Govt, and UAW not stepped in as major stakeholders, then parts of GM would have been sold. Those buyers would want a ready, willing and able workforce and I would have been given an offer. Do you think all the Lehman Bros. employees are still on unemployment rolls? No, they landed jobs with the companies that picked up the pieces of Lehman Bros.

    • 0 avatar
      3DSFX

      Christy: Have you noticed that Ed is CEO AND Chairman of the Board? Sound like a familiar situation? Reminder: The CEO is supposeto be held accountable by the board. How likley do you think THAT is? Was Red ink Rick? NO. It means nothing in the current situation that he’s from the “outside”.

    • 0 avatar
      Christy Garwood

      3DSFX, Yes, it is crystal clear that Ed Whitacre is the CEO and Chairman of the Board, just like Rick Wagoner. And about half of the BofD are new since August 2009. Lots of companies are run the same way.

      I was five rows from the stage when Ed Whitacre had an all-employee broadcast about three days after Fritz Henderson resigned. His demeanor and words made it clear that the new leaders (that have been at GM a long time) he introduced were being held accountable for profits. I had never seen that before here at GM.

      So, yes, I think it is highly likely that Ed Whitacre will be held accountable by the other board members and himself to 1) pay back the USA loans 2) be profitable 3) create value in the company so that a valuable IPO can be executed to benefit the three major stakeholders.

    • 0 avatar
      3DSFX

      @ Christy: I am a GM insider just like you. I’m a designer and have been for a long time. Alas, I find myself on the other side of the fence from yourself even though I do ofcorse have a personal vested interest in GM’s success. I base my opinions on GM’s past actions which speak for themselves, if you choose to listen that is. As for the question at hand: Do people like Lutz deserve to make more? Only if you believe he is a great executive. If you do, you’re entitled to that opinion. Based on GM’s past actions, they WERE high payed executives and as anyone can see, they drove the company into the ground and lost billions. So higher pay DOES NOT ensure better performance. IMO people like Lutz (especially in GM’s pyramid structure) are so far removed from reality they are not under any circumstances qualified to make the decisions they make. They do not understand in any way shape or form regular people working in the trenches like you and I and every other middle class American for that matter. From my perspective in the trenches: There is no such thing as “new GM”. It does not exist. Ed did not oust the management down to the supervisor level so therefore there is no change since middle and lower management are the culprits at GM for enabling the GM poisonous culture. It’s business as usual. Therefore, I submit to you that the people like Ed and Lutz are so far removed from you and I that, plain and simple, they just don’t know what is happening at our level. If they did, the supervisors and middle managers would have been replaced with the outsiders that actually know how to manage people. So nothing has changed. My job is 90% wading though logistical red tape that nobody understands and 10% designing just as it always has been. Now if you are one of the lucky few that work at GM NOT bogged down in a day to day logistical nightmare that keeps you from doing your real job, more power to you! You go girl! I see allot of anonymous posters on the GM internal blogs that hold this same opinion. More than I would have ever thought. I also choose to remain anonymous for fear of retaliation.

    • 0 avatar
      Christy Garwood

      3DSFX, I agree, GM’s leaders of the past and the results – BK – speak for themselves. Well managed companies do not go BK. As for the question at hand about Lutz and the other leaders deserving to make more money – I choose not to share my opinion.

      I do believe that it is my responsibility and everyone else’s in the trenches to communicate up whenever we are given the chance to offer solutions to the problems that we see. I figure I have several choices – stew silently about how badly things are managed, complain anonymously about the issues and problems, or step up and do something about it with my name on the line. Pointing out a problem and offering a solution is better for my temperment than remaining silent. At least I sleep better at night. But I understand that not everyone feels the same.

      As for poor managers, my gut tells me they are everywhere, not just at GM. I have dealt with my share of poor, great and in-between managers. I compliment the great ones, try to train the poor ones, and encourage improvement for the in-between. All in the name of designing, building and selling the world’s best vehicles, regardless of who is in a leadership position and how much they are paid.

      BTW, I know first hand that GM’s flush and gap fits improved tremendously after Lutz arrived. I give him credit for his leadership in improving our dimensional and surface finishes and driving balance and continuity in our styling.

    • 0 avatar
      3DSFX

      Well normally I would agree with your paragraph 2. Except my direct supervisor would have none of that. Perhaps with your current supervisor you would be taking much less of a risk than me. My supervisor is also 100% backed by a totally disfunctional manager as well. Both create problems and fires instead of solving them and streamlining. Safer for me to stay anonymous unfortunatly. And also my observation is that across the company there are more likley people in a similar situation to mine than your unfortunatly. What can be said. Supervisors. Same ol Same ol. Managers. Same ol Same ol. = GM Same ol Same ol. Too bad to because are fall from greatness is a sad sad thing.

  • avatar
    educatordan

    Wow, Maximum Bob, thanks for the laugh. I’m a teacher who has been doing my job for almost 10 years, I’m pretty close to finishing my masters degree, I have a Level II Professional licence (level II of III being the highest I could attain). I make $45,000 per year before taxes. I’ll make you a deal Lutz, let’s trade compensation and I’ll keep doing my job and you keep doing yours. I don’t want your job, I love mine and given that you came out of retirement to do yours again, I assume you love yours too. But if you feel your being underpaid, then let’s give you a dose of middle class reality.

    BTW Bob is my avatar cause he’s such a great symbol of GM don’t you think? I really like the way he has his hand cupped to his ear in this picture, although he’s generally completely tone-deaf all the time.

  • avatar
    1996MEdition

    I’ll give Bob the same advice one of my former employers told me when I requested a raise, “You are free to pursue other opportunities if you do not like your current compensation structure.”

    I hear Wal-Mart is looking for greeters…..

  • avatar
    50merc

    Lutz: “…over time, clearly a company that overcompensates senior executives is going to have a market share retention or customer recruiting problem.”
    There. Fixed it for him.

  • avatar
    Dynamic88

    GM has had retention problems for decades – they’ve been able to retain execs long enough that they eventually rise to positions of power and even make decisions.

  • avatar
    crash sled

    Lutz is emblematic of everything that went wrong with the Detroit 3. The “car guys” were essentially a bunch of smoke-blowing salesmen.

    Hey Bob, if we have to pay non-car-guys, an ex-Boeing executive, and an ex-telecom guy, to come in and clean up after you and the rest of your fellow “car guys”, maybe we should just cut out the middle man, and get rid of you.

    Or better yet, you could get rid of yourself, and save us the trouble.

  • avatar

    I don’t know how much they are paying Docherty, but she appears to be wearing an Afghan Rug.

  • avatar
    tced2

    We can relax. We have a pay czar to keep tabs on any excesses. Or the new members of the board of directors (picked by the politicians).
    Who’s going to watch out for the excesses of the masters (the federal government)? Talk about living large – the federal government could learn some lessons.

    Back to Lutz.
    One guy (no matter how talented) can’t fix GM. Much of the die was cast before he came to the company. When he was last mostly in charge (Chrysler in the 90′s) – Chrysler was a fairly successful company. So successful that one of the masters of the auto universe – Diamler bought them.

  • avatar
    cc-rider

    Superb article Edward! The first paragraph made me smile!

  • avatar

    What should be the pay of a bunch of bozos, and here I’m talking only about MANAGERS like Lutz, who drove a great company from worldwide prominence into bankruptcy?

    It wasn’t the line workers who built crummy cars and crushed the EV1!

    FIRING is about the minimum; some would say they should be prosecuted on National Security grounds, for having done the work of America’s enemies by destroying GM.

    LOWER their wages, or FIRE them without benefits, would be the minimum penalty.

    • 0 avatar
      1996MEdition

      …..however, it was a line worker that didn’t squeeze grease into my left tie rod end of my 1997 S-10, resulting in it falling apart (thankfully I was stopped). That’s the day I vowed to never again buy a UAW built vehicle.

    • 0 avatar
      tced2

      I don’t think Rick Wagoner or Bob Lutz were building cars on the line.

      Check your history, the EV1 was discontinued long before Bob Lutz was in the executive ranks of GM. (end of EV1 about 1999. entry of Bob Lutz to GM 2002.)

    • 0 avatar
      mikey

      @1996M Edition Your tie rod end should of been lubed before the assembler pulled it out of the basket. The inspector/repair guy at the end of the X chain SHOULD have noticed it. I can’t imagine how the castor/camber/toein dude missed it. But it happened!

      Your dealer should have caught it at PDI. I guess they missed it also.

      The question on my mind would be. How long, or how far did you drive it before it broke? Even a dry tie rod end would give 10,000 miles. Did your oil change guy miss it also?

      I know, its so much more entertaining to beat up the UAW guy.

  • avatar
    criminalenterprise

    Let them eat stock options.

  • avatar
    twotone

    “…we are being paid way, way, way below market.” And what “market” would that be?

    Twotone

  • avatar
    mtymsi

    LOL, this is too funny!!! Really!!

    If Lutz would just take a long walk down a short pier and take Docherty with him GM would be in a position to hire some talent that may have a chance at actually helping them.

    The way Lutz references accountability it sounds like a topic he has little familiarity with especially if he thinks he deserves more money because he is now accountable. The problem of course being that none of GM’s top brass was accountable to anyone until now.

    Hopefully very soon Ol Bob will be fading off into the sunset.

  • avatar
    rpol35

    I’d be OK with canning him and spreading his salary around to the others; not like they deserve of course.

  • avatar
    wsn

    Well, easy. Just fire everyone from GM/Chrysler who has a salary over $200k. Merge them with Ford, double A.M.’s salary and ask him to clean up the mess.

    But then, it’s not how the “chosen one” planed.

  • avatar
    tced2

    I think the amount of pay is somewhat of a red herring. I suspect if you paid all of the upper management nothing ($0), you would come up with “savings” of hundreds of millions of dollars. This won’t quite make up for losses of billions. You have to go where the money is.

  • avatar
    mpvue

    bob lolz.

  • avatar
    gslippy

    I’ll be in the minority here. I agree with Maximum Bob on this one.

    1) “we are being paid way, way, way below market”. This is true, given the government-imposed salary reductions. However, this is the downside of being enslaved to the government’s largesse.

    2) “clearly a company that undercompensates senior executives is going to have a retention or recruiting problem”. This is a fact.

    It’s easy to engage in class envy given GM’s failures and the relative pay of its executives. As a believer in market forces, I say GM’s cause will not be helped by cheapening its executive pay scale. The net result will be an executive brain drain from the company.

    The people who can actually do a better job than GM’s current execs (besides a virtual world of bloggers) are… other automotive execs, who will be hard-pressed to strive for jobs over at GM due to their revised salary structure.

    A better outcome would be for GM to restructure under their own power, rather than get a government “loan”.

    • 0 avatar
      mikey

      As GM hourly retiree I can’t help but agree with gslippy,to a point. Lets see some positive results,like the loans paid in full. An IPO, that at least starts to pay back some of the taxpayers money,before we start asking for a raise.

    • 0 avatar
      Facebook User

      Speaking of market forces, didn’t they already determine GM should die? That’s what I thought…

    • 0 avatar
      Christy Garwood

      Facebook user, which market forces, demand, as in sales? TTAC regularly posts sales figures, check them out.

    • 0 avatar
      Facebook User

      Sales figures don’t take into account whether the company make a profit on those sales. Having the bestselling car on the planet means absolutely squat if you’re not making money.

      Thanks to its high, UAW-mandated costs and liabilities, GM was unable to post profits on any of its mainstream vehicles. To make money, those vehicles would have needed to sell for between $3K-$10K more than GM could get. Look it up.

      When the market is unwilling to pay what you need it to in order to make a profit, that’s called failure. At least it used to be.

    • 0 avatar
      Dynamic88

      This econ 101 view of exec pay seems to miss the fact that GM payed market rates for 40 years, yet -demonstrably- attracted 2nd rate (being generous here) talent.

      There is a basic break between pay and performance. Has been for a long time. It’s not unique to the auto industry, though it’s perhaps the most egregious example.

    • 0 avatar
      Christy Garwood

      @ Facebook User, the last time I checked, automotive OEMs do not disclose profits by models. However, when GM was a publicly traded company, they filed public quarterly and year-end earnings reports. Do you remember when GM was selling tons of vehicles in 4Q 2007 but posted a $39B loss? It was a write down of a tax deferment taken previously.

      The reason I bring up this example, IMO, it could be an indicator of a financial management failure, rather than a failure in the market place or a failure to make a profit on the vehicles sold.

      I will reprise a couple of my previous comments: 1) GM has always sold more vehicles in the USA than any other competitor which means people want GM vehicles 2) I look forward to the next public financial disclosure by GM Co. LLC to determine if in fact GM is selling those vehicles at a profit.

    • 0 avatar
      Facebook User

      I’ll take that bet, Christy (and my sincere apologies for mangling your name in an earlier post.) I’m particularly eager to know how much money Gov’t Motors lost on fleet sales of the Cobalt, Equinox, Impala, Terrain, and Malibu. Swear to God, I’ve yet to see a privately-owned example of the latter — all Malibus I’ve seen have R-A-C barcodes on the back glass.

      Incidentally, I know of two people who work at Gov’t Motors stores. One sells Chevy, the other Buick and GMC. They’re in different states, separated by most of the US. Both told me their dealerships’ sales were down from their already-horrid January ’09 figures… yet GM boldly proclaims January 2010 sales skyrocketed across the board?

      I smell a rat there… so I don’t know that we can trust what GM announces in the first place. But hey, it’s not like our government ever lies, right?

    • 0 avatar
      Christy Garwood

      @ Facebook User, typos happen. Since it is “Do a Grouch a Favor” Day, I won’t tell you my snarky spelling tip to get my name right.

      I don’t know where you live (Next to Atlanta’s Hartsfield airport?) or drive, so I don’t know why all you ever see are rental Malibus. It isn’t a secret that GM sells more vehicles in the heartland than on the coasts. BTW, the only bets I have made are with Robert Farago. He thinks GM will be gone by Oct. 2010. I don’t.

      You say “Incidentally, I know of two people who work at Gov’t Motors stores. One sells Chevy, the other Buick and GMC. They’re in different states, separated by most of the US. Both told me their dealerships’ sales were down from their already-horrid January ‘09 figures… yet GM boldly proclaims January 2010 sales skyrocketed across the board?”

      Where did GM say ” January 2010 sales skyrocketed across the board?” Here is the header from the 2/2/2010 press release
      (http://www.gm.com/corporate/investor_information/sales_prod/):

      “Chevrolet, Buick, GMC and Cadillac Retail Sales Up 3 Percent
      – Total Sales for These Brands Up 30 Percent

      GM Total Sales Increase 14 Percent
      Fourth Consecutive Month of Retail Sales Gains for GM’s Four Brands
      Chevy Equinox, GMC Terrain and Cadillac SRX Retail Sales Up 161 Percent
      Fleet Sales Comprise 29 Percent of Total Sales”

      All manufacturers report year over year sales as well documented by TTAC. Two dealerships do not make a statistically significant sample size. GM reports its numbers for the whole market, not just two dealerships. It is possible those two dealers do have lower sales than last year. So?

      It is easy to say someone or some company is lying. It is quite another to show facts that support that opinion. I repeat, let’s look at the next public disclosure of GM’s financials and then discuss profit and loss.

  • avatar
    jkross22

    gslippy, I suspect Bob is comparing the current level of accountability to what he had before… essentially no accountability.

    While I’m not surprised Bob feels the way he does (which is to say, like a spoiled four year old), it does beg the question… should his role be divided into 2 or 3 different parts, each being done by ‘up and comers’ from other manufacturing companies?

    Perhaps there is a method to the madness. Perhaps this salary ceiling was instituted to address the real problem of GM – the immense leadership void that is currently being filled by GM lifers and corporate climbers who have little leadership experience or capability…. those who thrived in an environment with little accountability and got promoted up instead of being let go.

    Perhaps LaHood’s comments that were directed at Toyota should have been directed to GM: “We’re going to hold their feet to the fire.”

    • 0 avatar
      Steven02

      jkross22,
      No where in the article did Bob compare levels of accountability. He says that the job has a level of accountability and responsibility that doesn’t match the compensation. To that, he is 100% correct. If you look at execs at other companies, automotive or other, that have his level of title, there is a large discrepancy in pay.

      Say you want to take his job and give it to 3 people instead of 1, you are probably going to be paying more for the work 1 person was doing. Not only that, those people have to report to someone, and essentially you have the same problem, someone needs to get paid a good deal of money for that position/title.

      I understand what you are trying to say about the GM lifers getting kicked out, and that isn’t a bad thing. But there is a problem. If GM can’t hire the people that are being replaced with good talent, you haven’t fixed that problem, but created a very big different problem, no to do the job period.

  • avatar
    Matt51

    Fire his ass. Replace him with an exec recruited from Korea, who probably would work for 20% of his compensation. Would also perform much better.

  • avatar
    DeadEd

    It strikes me that in a contracting industry and in a labor market where there are far more workers than jobs (10 percent unemployment anyone?), that the executive class should keep their yaps shut. Salary caps aren’t keeping GM from being competitive in the market for engineers, or even competent middle management.

    If the executive leadership feels undercompensated, as others have already said, let them explore opportunities elsewhere. They are NOT going to find them across town (Ford?, Chrysler?). They might be able to find work in a growth market (Asia), but even there, they might be suprised at the compensation package offered…and realize that it likely is a short-term endeavor until they can be replaced by home-grown talent.

  • avatar
    Steven02

    I know most people here are very upset about GM’s bailout, and they have every right to be. But complaining about the past isn’t going to help, nor will hindering the chance of GM to be successful help.

    GM needs to pay for top talent to help the turnaround. Among the reasons why GM had a very hard time finding a CEO is because of the pay restrictions. Many here were happy to see Rick W. go, and Henderson as well, calling them GM lifers. I don’t think it was a problem to let either go. Now the void is being filled with a CEO who is also chairman, again because they couldn’t get a CEO.

    To get money back from a GM IPO would require GM to be successful. One would think that everyone who was upset about this would want the IPO to be as successful as possible. Say it makes up for 80% of the investment in GM. That would be better than 50% because GM couldn’t hire anyone to help run the company.

    Also, take the context into which Lutz gave the remarks. The Treasury dept. is reviewing the pay. If Lutz says he is being paid at the level of the market, the Treasury might want to decrease the pay, furthering the problem of the talent issue. If Lutz says he is being too little, it could help GM get the talent it is looking for. For GM to be successful, there needs to be a culture change, which is happening. Outside voices are also good to have. The outside voices are hard to come by at this time because of pay restrictions. Also, it might be useful to read the last line before saying giving Lutz all the criticism that most of you have.

    The pay limits for GM’s top executives are understandable considering the firm’s stay in bankruptcy court last year, Lutz added.
    “You can’t go through Chapter 11 and come out the other side and expect to have all of the same perks and comps as you did before,” he said. “We just hope it doesn’t stay this way too long.”

    • 0 avatar
      Christy Garwood

      Steven, thanks for providing the rest of Lutz’s quotes from the article for the rest to see the whole context of the remarks. I bet not many here take the time to jump to the article to read the quotes EN did not provide.

      EN, I realize you are entitled to your opinion, but leaving out part of the quotes just to support it seems contrived.

    • 0 avatar

      Sorry, but Lutz’s tacked-on qualifier doesn’t change my opinion. If limitless compensation from an apathetic board didn’t hire GM enough talent to turn it around at any point in its decades-long decline, why would it now? If Lutz thinks this is his a long-term issue, he should refrain from bemoaning it in the press until the company goes private. And don’t worry, the government has already made it fairly clear that it wants out fast more than it wants taxpayers to be made whole.
      Lutz and company will feast, er, receive fair compensation, soon enough. And given the fact that he only has a job thanks to billions of dollars of my future tax payments, I assure you there’s nothing “contrived” about my opinion on this.

      Speaking of suspect motives, Christy, we’ve asked several times that OEM employees identify themselves as such, especially on topics related to their employers.

    • 0 avatar
      Christy Garwood

      EN, it was obvious that the other quotes did affect your opinion, which you are entitled to. But by leaving them and not describing why they didn’t sway your opinion in another direction seems like you are leaving out part of the truth.

    • 0 avatar
      wmba

      OK Garwood, this is too much.

      As a Canadian, I paid two bucks for every one kicked in by an American taxpayer to this GM sham.

      The Canadian Federal Government deficit this year has the full $10 billion loaned to GM on the books. Plus whatever we kicked in for Chrysler, about $4 billion.

      Edward Niedermeyer published an article this past December (and also in the NYT) which showed what a sham this loan payback is. Have YOU read it? Is it in any way materially incorrect?

      If it is not, then GM is only GIVING back (not PAYING) funds we the people already gave them. GM has not been on some amazing profit march since the bankruptcy, now has it? So the payback money is not earned income. Period.

      So I am supposed to believe that GM executives, living in abject poverty on a half-million bucks a year, are so underpaid that they are not motivated to do a good job? That every US executive out there is motivated only by money to do a good job? I don’t believe it.

      If the ones in charge at GM are feeling it’s unfair to be asked to do the job for government pay — well tough. Get rid of the silly buggers and find someone who can do the job without spinning me garbage like “Here’s your money, I just found it in my other pocket.”

      Go and tell your execs that. That’s about how diplomatic Whitacre was when he told German reporters, “Tell that to your Chancellor”, when he boasted that GM could rescue Opel all by itself. A deeply hollow boast.

    • 0 avatar
      Christy Garwood

      wmba, you said “Edward Niedermeyer published an article this past December (and also in the NYT) which showed what a sham this loan payback is. Have YOU read it? Is it in any way materially incorrect?”

      I have read the articles penned by EN that you reference.

      My understanding of the public documents in the bankruptcy court is that there are two major components to the support GM received from the US and Canadian Governments and the UAW.

      1) A bonafide loan with interest payments due which totalled about $6.7B (about $1B was paid in Dec. 2009)

      2) Capitalization of about $50B of which the US Govt received about 62% of this in a special stock (IMO special preferred), Canadian Govt about 11%, UAW health care fund about 17% – the rest went to a special class of stakeholders (I don’t know who these holders are but my guess is large pension funds that held GM stock before the BK)

      GM’s profit position since it exited the BK courts in July 2009 is also part of the public record. There was a special line item loss of approximately $5B reported in December as a result of the Delphi bankruptcy resolution.

      In the news yesterday, http://www.businessweek.com/news/2010-02-16/gm-saving-10-7-billion-means-cash-for-truck-upgrades-correct-.html, Whitacre told David Welch that he expects positive net income. And as Maryann Keller states later in the article, the brands and plants GM left behind remove structural costs (as bankruptcy is supposed to do) that will IMO, allow GM to be profitable or as you put it earn income. In this same article, Whitacre is cited as saying that he wants to repay the outstanding $5.7 B in fed loans by June 2010.

      Regarding executive pay, you, Lutz, and I are free to express our opinions. Or not.

    • 0 avatar
      AccAzda

      Christy Garwood:

      DO not forget that GM still owes the U.S the 57.6 BILLION dollars under TARP, money WE as a COUNTRY will never get back. http://en.wikipedia.org/wiki/General_Motors

      Somehow.
      I don’t see US getting that chunk of change back. Its just swirling around Lutz pants pockets.

    • 0 avatar
      Christy Garwood

      AccAzda, the $57.6 B of which you speak will be poured back into public coffers when the IPO is executed. What is not known by any of us yet is

      1) when the IPO will occur
      2) what the value of the IPO will be

      Your statements prior to these events are just opinions.

  • avatar
    mdwheary

    Is that the promo pic for the new Three Stooges movie?

  • avatar
    Mekkon

    “I would say we are being paid way, way, way below market.”

    Hey Lutzo, remember that whole thing about how GM is no longer part of the MARKET? Remember how according to the fair and open market, GM shouldn’t exist anymore?

    Cue the world’s smallest violin, playing a sympathy tune just for you.

    • 0 avatar
      Facebook User

      +1, amen and HALLELUJAH! I’ve voted with my pocketbook that GM has no place in the modern automotive marketplace, as have hundreds of thousands of others. But instead, the government used my tax dollars to bail this sad excuse for a company out.

      Lutz can sit and spin as far as I’m concerned. Any “car guy” cred he had from his days at Chrysler has evaporated. Now, all he can do is pitch Sino-Buicks and hawk “CHROME!” accents. Pitiful.

    • 0 avatar
      AccAzda

      MAN oh man!

      I second, third and fourth that comment.

      GM should have been allowed to go into bankruptcy. They should have followed every failed brand into COMPLETE and TOTAL obscurity.

      Pontiac, HUMMER, SATURN have died because of GM lack in operating each brand, and treating them like a trim level. — wont get into that amount of hatred I have for that discussion.

      I can ONLY wish EVERY SINGLE DAY that GM DOES go bankrupt, because I and hundreds of millions of other RIPPED OFF Americans believe the US will never NEVER N E V E R see the total amount of money given to GM.

      As far as LUTZ goes..
      He doesnt deserve the money I got paid.

      He doesnt deserve the money that people 10 steps below him get.

      The vehicles that HE championed.. HAVE FAILED.
      Solstice and SKY were a disaster.
      The G8… that damn car will never arrive in the market, except to cop fleets.
      The HYBRID GMT900 frame… failure.

      This is the very person who TOLD the American PUBLIC that we don’t want a Zeta wagon.

      They they produce a CTS wagon, along side the CTS sedan, that’s COSTLIER than the CUV, and they don’t believe that its in direct competition. Seriously?!

      Since when does he GET to tell US what gets built?

      Ever since they took my TAX dollars for the next hundred years.. I believe that allows me the right to get the car I WANT, and not what he DECIDES.

      CHRISTY GARWOOD..
      Hundreds of millions of people would love for GM to go bankrupt.
      They don’t serve the American people with vehicles wanted and needed, and only serve as a giant LEECH on the GOVT.

      As for as.. paying them enough to have competitive salaried people?

      If they were paying them what they deserved BEFORE GM went into bankruptcy… they DEFINITELY deserve a MAJOR CUT in PAY.

      *Not enough room on the Internet to voicalize my hatred.. for GM / LUTZ or how much money he shouldnt get.* If it were me, Id like the entire BOARD, RICK, FRITZ and LUTZ replaced by people who actually know how to run a manufacturing company because the B.S games they play now.. for what THEY ARE being paid.. IS getting OLD.. FAST!

    • 0 avatar
      Christy Garwood

      AccAzda, did it ever dawn on you that if GM goes bankrupt again, that the US and Canadian Governments will never get a return on their investments? And if people buy GM vehicles now, it is possible that those stakeholders will see a return on the investment (how close to 100% is anyone’s guess until the actual IPO occurs).

      Oh, and just to get you caught up on current events, Rick left GM March 2009 and Fritz left GM Dec. 1, 2009. And Lutz is now in a consultant role to Ed Whitacre and the executive leadership. Also Ed Whitacre has already publicly announced that GM will in fact pay back the loans 100% in June 2010.

      Finally, what car(s) do you suggest GM should build? We really are interested in knowing what potential customers desire. If you go to gmfastlane blogs, you will find The Lab, where you can make your desires known regarding GM vehicle design and function. Or just let me know here. I will pass on the info to the appropriate functions.

    • 0 avatar
      Facebook User

      @Christy — I think I speak for many on here when I say, we view that $58 BILLION of OUR money, much like a damage deposit on a dilapidated apartment.

      It’s gone, nothing we can do can ever get it back. Might as well trash the place.

  • avatar
    porschespeed

    @ Christy Garwood,

    C’mon now. We all know that the increase in water level merely put GM circling the bowl a little closer to the rim than it was pre BK. The point of shoveling $50+B into GM boiler furnace was simply to have the company unwind in a more orderly fashion.

    Perhaps Whitacre can keep the general public from paying attention to what the man behind the curtain is doing long enough to get an IPO done. The US taxpayer gets 10% of their ‘investment’ ‘returned’. Doubtful though. Besides, from what I know about Whitacre from SBC/ATT insiders, he’s about as incompetant as Nardelli.

    As to what cars we think GM should build, I am almost stumped as to how to reply…

    The fact that the question could even be put forth with anything resembling a straight face is beyond the pale. The average American wants a well built, stylish, quality vehicle. Things that GM still can’t grasp to this very moment. (Yes I was at a Chev/Cad dealer last week. Build quality on a Caddy? Still sad.)

    GM has been ignoring the wishes of the consumer since, ohh, 1970. I guess you really need to leave SEMI to figure out what happens in America. We’ve been able to buy what we really want since the early 70s. The relentless sales decline for the last 30 years would have been a clue, IF there were a single soul in a position of authority who cared.

    • 0 avatar
      AccAzda

      If GM built cars WE wanted..

      I could publish my own book as thick as WAR and PEACE of the cars I wanted GM to make.

      Heck,
      Even the cars Lutz put together were failures, says a lot about him.


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