Bailout Watch 183: Senator Chuck Grassley: "Be Like Lee"

bailout watch 183 senator chuck grassley be like lee

Dear Mr. Mulally, Mr. Wagoner and Mr. Nardelli:

I understand that your company has been lobbying the Department of Treasury and congressional leaders for additional financial assistance via loans or through inclusion in the Troubled Asset Relief Program. While I understand the economic turmoil that many American businesses face today, I think it’s appropriate to ask those who seek a bailout from the federal government to do everything they can to first cut internal expenditures, including and especially executive salaries and compensation packages.



Most hardworking, taxpaying citizens would like to see all companies, including yours, pursue alternatives to a federal bailout. For example, some experts believe that Chapter 11 bankruptcy would help companies succeed in the long run by allowing them to reorganize while continuing production. They argue that such an alternative will preserve jobs while a handout would only serve as a band-aid to the problems caused by a lack of innovation in your industry.

However, should the federal government assist your company and other auto manufacturers who have failed to make sound business decisions, it’s important to remember that any funding you receive is money from the pockets of American taxpayers. Many men and women are pinching pennies just to get by, making sacrifices and changing their lifestyles to stay in their homes, send their children to school, and grow their retirement savings. I think it’s highly appropriate, if not absolutely necessary, that you do the same.

Most American taxpayers are rightly concerned about the federal government coming to the aid of companies who are in financial trouble, possibly as a result of their own mismanagement and poor business decisions. I agree that it’s time to stifle corporate excess and stop rewarding bad business practices so that we are not providing an incentive for irresponsible behavior in the future. That is why I have asked the Treasury Department and the Federal Reserve to rein in the executive compensation, travel, and other expenses of the companies and banks that are getting federal financial aid.

As you and your colleagues continue to seek federal financial assistance, I urge you to keep in mind the actions taken by former Chrysler Chief Executive Officer Lee Iacocca. When his company was saved from bankruptcy by the Loan Guarantee Act of 1979, he slashed his yearly salary to just $1.00 and those of his executives by as much as 10 percent. Lee Iacocca essentially worked for pennies to demonstrate leadership and forcefully prove to his colleagues that he was ready to make the same sacrifices they would have to make in order to reinvigorate Chrysler. Allow me to quote straight from Mr. Iacocca:

“I began by reducing my own salary to $1.00 a year. Leadership means setting an example. When you find yourself in a position of leadership, people follow your every move. I don’t mean they invade your privacy, although there’s some of that, too. But when the leader talks, people listen. And when the leader acts, people watch. So you have to be careful about everything you say and everything you do. I didn’t take $1.00 a year to be a martyr. I took it because I had to go into the pits. I took it so that when I went to Doug Fraser, the union president, I could look him in the eye and say, ‘Here’s what I want from you guys as your share,’ and he couldn’t come back to me and ask: ‘You SOB, what sacrifice have you made?’ That’s why I did it, for good, cold, pragmatic reasons. I wanted our employees and our suppliers to be thinking: ‘I can follow a guy who sets that kind of example.’”

Mr. Iacocca stated that a government-backed loan was not the only thing that saved Chrysler when it was on its deathbed. Rather, it was the “equality of sacrifice” that allowed Chrysler to survive and return to profits. He stated, “It wasn’t the loans that saved us, although we needed them badly. It was the hundreds of millions of dollars that were given up by everybody involved.”

As you attempt to lead your company out of the red, and especially if you intend to do so with the assistance of federal funds, I urge you to emulate Mr. Iacocca and be the first employees of your companies to make a personal sacrifice. Hardworking American taxpayers, including me, expect it.

Sincerely,

Charles E. Grassley


United States Senator

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  • Art Vandelay Report: TTAC Dead in 2022
  • Art Vandelay I bet more Ferraris get driven than people comment on this site post-update lol
  • Jim Holmgren Absolutely love my TR8. It's a thoroughly modern car by Triumph standards. Comfortable to drive and ride in. AC and power steering - plus power brakes. The Rover V8 is the perfect engine for the car. It pulls strong without being ridiculous and it makes "a proper noise". In convertible form, I see nothing controversial about the styling for the 1980s.
  • CaddyDaddy Most TR8s have a pair of side-draft Stromberg carbs. HUH? I do believe those are SU or British made Skinners Union Carbs. May want to fix the article before some British Car loyalist has a heart attack in his garage while reading the article in the Midlands.
  • Arthur Dailey The only TR-8 that I knew was a 'project' car that sat in the same driveway for many, many years. Did however have a friend with a TR-7. Can confirm that the instrument panel, interior materials such as fabric/upholstery, ergonomics and in particular the seats were superior to my Corvette of the same vintage. However in the first week that my friend had his TR-7 while pulling out of a shopping centre, his driver's side door 'fell off' the car. Quality control was to put it mildly, primarily just a 'rumour' at B.L. during that period.
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