Lutz: GM Execs "Way, Way, Way" Underpaid

by Edward Niedermeyer

Published: February 15th, 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.

Besides, as noted auto analyst Maryann Keller puts it,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 beUntil 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.

#Bailout #Compensation #GM #Lutz

Edward Niedermeyer

More by Edward Niedermeyer

Comments

Join the conversation

7 of 58 comments

Mekkon on Feb 15, 2010

"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.

Like Reply
- See 3 previous
- Rob Finfrock on Feb 15, 2010
  
  +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.
  
  Like
- Accs on Feb 17, 2010
  
  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!
  
  Like
- Christy Garwood on Feb 17, 2010
  
  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.
  
  Like
- Rob Finfrock on Feb 21, 2010
  
  @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.
  
  Like
Porschespeed on Feb 17, 2010

@ 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.

Like Reply
- Accs on Feb 17, 2010
  
  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.
  
  Like

Recent Comments

Alan Well, it will take 30 years to fix Nissan up after the Renault Alliance reduced Nissan to a paltry mess.I think Nissan will eventually improve.
Alan This will be overpriced for what it offers.I think the "Western" auto manufacturers rip off the consumer with the Thai and Chinese made vehicles.A Chinese made Model 3 in Australia is over $70k AUD(for 1995 $45k USD) which is far more expensive than a similar Chinesium EV of equal or better quality and loaded with goodies.Chinese pickups are $20k to $30k cheaper than Thai built pickups from Ford and the Japanese brands. Who's ripping who off?
Alan Years ago Jack Baruth held a "competition" for a piece from the B&B on the oddest pickup story (or something like that). I think 5 people were awarded the prizes.I never received mine, something about being in Australia. If TTAC is global how do you offer prizes to those overseas or are we omitted on the sly from competing?In the end I lost significant respect for Baruth.
Alan My view is there are good vehicles from most manufacturers that are worth looking at second hand.I can tell you I don't recommend anything from the Chrysler/Jeep/Fiat/etc gene pool. Toyotas are overly expensive second hand for what they offer, but they seem to be reliable enough.I have a friend who swears by secondhand Subarus and so far he seems to not have had too many issue.As Lou stated many utes, pickups and real SUVs (4x4) seem quite good.
28-Cars-Later So is there some kind of undiagnosed disease where every rando thinks their POS is actually valuable?83K miles Ok.new valve cover gasket.Eh, it happens with age. spark plugsOkay, we probably had to be kewl and put in aftermarket iridium plugs, because EVO.new catalytic converterUh, yeah that's bad at 80Kish. Auto tranny failing. From the ad: the SST fails in one of the following ways:Clutch slip has turned into; multiple codes being thrown, shifting a gear or 2 in manual mode (2-3 or 2-4), and limp mode.Codes include: P2733 P2809 P183D P1871Ok that's really bad. So between this and the cat it suggests to me someone jacked up the car real good hooning it, because EVO, and since its not a Toyota it doesn't respond well to hard abuse over time.$20,000, what? Pesos? Zimbabwe Dollars?Try $2,000 USD pal. You're fracked dude, park it in da hood and leave the keys in it.BONUS: Comment in the ad: GLWS but I highly doubt you get any action on this car what so ever at that price with the SST on its way out. That trans can be $10k + to repair.