By on July 31, 2009

Her neighbors to the south may not recognize the fact (even parenthetically), but Canada kicked-in as-yet-uncounted billions in federal funds to keep the Chrysler and GM zombies in a vertical position. Whatever the final tally, the Motown subsidy was the largest bailout in Canadian history. In exchange, they received a seat on both automakers’ Board of Directors. Ottawa and Toronto chose Carol Stephenson, dean of the Richard Ivey School of Business at the University of Western Ontario, to bop on down to RenCen to see what’s shaking. Auburn Hills hosts George Gosbee of Tristone Capital. OK, so how much are they getting paid for their time? They ain’t saying, exactly. And Canadians are not happy. Specifically, the Edmonton Journal:

Chrysler and GM refuse to disclose their compensation—along with all other board members—is an outrage and insult to citizens on both sides of the border.

To be precise, GM admits with comical simplicity only that board members are paid a “minimum of $200,000” a year plus a “free car,” which we assume is not a loaded Aveo. Chrysler, incredibly, still declines to reveal any financial information about board remuneration, citing privacy issues.

It gets worse.

While [Canada’s GM rep Carol] Stephenson-––who sits on a number of other government and corporate boards and will retain her post as dean––-will receive a base cash payment of $200,000 and a company vehicle, Chrysler has refused to reveal compensation for its board of directors. As well, both companies refused news media requests to release details of salaries for its Canadian CEOs.

Once upon a time, GM CEO Fritz Henderson swore under oath that the New GM would be transparent in all its dealings. While Fiat’s Sergio Machionne made no such pledge re: New Chrysler, is it too much to ask that these taxpayer-supported, not-to-say-nationalized automakers open their books to the people who made it possible for them to have books which they can open? Apparently so.

Which raises the inevitable question: what else are they hiding?

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5 Comments on “Bailout Watch 575: Canadians Demand GM and Chrysler Disclose BOD Members’ Pay and Perks...”


  • avatar
    psarhjinian

    The Canadian government very quietly stuck $4 billion into GM’s Canadian pension fund. GM has very little operations left in Canada to pay for the pensions so other people’s money once again picks up the tab.

    There’s a good reason for that.

    There are a lot more people not working for GM (but who did so in the past) than are actually working for them. Failing the pensions of those people would cause serious harm to certain parts of country; parts that are already hurting.

    Do you know how much of, say, Whitby/Oshawa/Bowmanville, St Catharines or Windsor/Chatham run on money that comes in via pensioners? It’s not a small amount, and unlike people like me who have been planning for the evapouration of the CPP and a functionally nonexistent corporate plan, GM retirees by and large did not bank on alternatives because they at the time reasonably expected the plan to be secure.

    Put it this way: for a few bucks extra in taxes, we buy our way out of an ugly collapse. I’d also like to add that the cash shortfall wouldn’t have been such an issue had the current government not shot it’s ideological wad on tax cuts that hardly anyone noticed.

  • avatar
    jpcavanaugh

    News flash to Chrysler: You are no longer a privately held company that doesn’t need to disclose your dealings. Though not a publicly held company in the strictest sense, the public owns you. I don’t really care what Fiat thinks about this, as Fiat only owns 10% of the company, IIRC.

  • avatar
    eh_political

    @ psarhjinian:

    Crazy, stupid, pandering tax cuts. Tax cuts that economists argued against. Billions that should have been used to pay down debt, or be held in reserve for a rainy day. And lest we forget, Canada’s budgetary surpluses were painful to achieve, came at the cost of some hard choices, some harsh cuts.

    With Canadian government revenue plummeting, and deficit spending climbing, it is difficult to defend the choices made by the current government.

    On the other hand, it is time to rack up massive deficits in Canada. If we don’t our dollar will rise and exports will collapse. Our economy depends on exports. By spending, at least we can shore up critical infrastructure, health and public services. Being fiscally responsible at the moment would be an economic trapdoor, a huge mistake. If there is pain down the road, we might as well make some permanent good come of it.

  • avatar
    NickR

    Chrysler, incredibly, still declines to reveal any financial information about board remuneration, citing privacy issues.

    Interesting really because the salaries of everyone working for the provincial government making more than $100,000/year has their salaries posted on a government website, for the sake of transparency.

    unlike people like me who have been planning for the evapouration of the CPP and a functionally nonexistent corporate plan

    Hey me too!

    Yes, those tax cuts had a certain visceral appeal but from a pragmatic point of view…bad idea.

  • avatar
    psarhjinian

    Yes, those tax cuts had a certain visceral appeal but from a pragmatic point of view…bad idea.

    They do sound nice, don’t they? I remember my boss getting hot and bothered about the prospect of them, but he makes a good three times my income.

    Income tax cuts are not evident or useful unless you’re well up the wealth chain, and cuts to them are exclusively gifts to the rich as upper middle, middle and lower classes don’t really notice a few bucks off each paycheque.

    The only people who do notice them, unfortunately, also write articles in newspapers. Or get elected to office. Or know people who are elected to office. Or are members of the Cato or Fraser Institutes. Or are just loudmouths. Or all of the above.

    Now, the sales tax cut, that’s something that all classes do notice, and one that the government should have kept in reserve until they needed to provide some quick economic stimulus. Cutting the GST in the middle of the recession might have been debatable given the cost of stimulus, but you could made a case. Cutting it when times were still reasonably good, and thusly gutting revenue just as we were tipping into a recession was catastrophically stupid. It would be like implementing Cash for Clunkers in 2007.

    The problem is that now we’re out of options. Increasing the sales tax—or any tax—would be political and possibly economic suicide. I have no idea why the opposition parties aren’t ripping the government a new one over this, except possibly because they’re cowards about being labelled as tax-friendly.

    I’m all for government intervention, but intervention for the sake of ideological purity or public relations claptrap is a silly thing to do.

    On a more topical note, I’m surprised that GM isn’t disclosing this. They’re even more a public company now than they were previously. Disclosure should be the name of the game.

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