"Wagoner Has Done a Great Job Influencing the Controllable Factors That Affect GM's Performance"
Even The Detroit News had a hard time spinning GM CEO Rick Wagoner's gi-normous pay rise as anything other than a travesty. But you gotta give home town scribe Sharon Terlep credit for trying. (Or not.) Her report on Red Ink Rick's $14.4m 2007 compensation waits until all of paragraph four before defending the man whose administration of the American automaker hasn't seen a profit since 2004. Terlep turns to Wall Street analyst John Casesa to do the deed. "There's a broad recognition that you've got to pay someone a lot of money to do this job," Casesa prevaricates. And then the quote above. Ah, so Rick's bottom line performance has been hamstrung by uncontrollable factors… Terlep underlines the point. "Broad economic forces, from soaring oil process to the collapsing U.S. housing market, have slammed GM and the domestic auto industry as the companies work to execute sweeping restructuring plans." So GM's $38.7b loss during the time of Wagoner's $14.4m pay package isnt' really Rick's fault, is it? In fact, he's something of a bargain! "Apart from the labor deal, Wagoner has overseen structural cost cuts that amount to $9 billion a year in savings." So that's alright then.
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And newspapers wonder why their businesses are falling off the edge of the universe ....
"Broad economic forces"? Uh, GM was losing obscene amounts of money before the housing market collapsed, when the average price of gas was still generally hovering below $3/gallon. (What'd they lose in 2005? $10.6 billion?)
In this part of California, we are now routinely paying $4 a gallon for fuel, diesel is $4.35 to $4.60. The for sale signs on late model SUV's are increasing (as our the ads for them in the local papers). What is looming is a disaster for companies relying big vehicles to make a profit. I know of at least six people in the past month who have purchased new cars, and all have been fuel efficient Hondas and Toyotas. GM CEO's salary, being what it is is probably not the image the company one would think the company would want to put forther during these times.