Saturday, November 22, 2008

The Beg Three?

It sure was a sorry sight to watch the heads of the Big Three--not to mention the bone-headed academic, Peter Morici, who contradicted himself at least half dozen times during his counterpoint, before Congress this week. But subpar performance seemed to be the order of the day in Congress as well---any measure to save the domestic auto industry from collapse is pennies on the dollar versus the yet unseen impact of the financial services bailout. On balance, it was all so bad from so many points of view that after a while, seeing it almost as Sarah Palin redux, I had to stop watching.

A lot has been made of the fact that these guys hopped corporate jets to arrive in Washington. Personally, I think they were just at the wrong place at the wrong time--there's no way that the heads of Lehman Brothers or AIG took Amtrak the other week when they, too, were on the firing line--they just didn't get called on it. Used judicially and structured properly, a corporate jet may save both time and money--as the head of a company typically has security and staff that travel with him/her, and commercial flights are notably unreliable. Having said this I agree with the uproar, because it's clearly a perq that has become a symbol of corporate greed and privilege as well (e.g. why does a guy who makes $21 million a year need to have the company pay for his family to travel--other than ego)? The criticism could be leveled, however, at countless other companies, including some of the other ones asking for government money. So to me, this issue, while valid, is also something of a red herring.

No, the bigger problem was that these guys were, to a person (including Gettelfinger), poorly prepared and out of touch with public perception, and they came across like corporate suits, not heads of organizations that may be bigger than some countries. Don't get me wrong. I have a lot of respect for what Alan Mulally has done at Ford, and it's a credit to him that the company is in the best shape of the three. But, for none of these men to be able to answer how they would use the money--or give any assurance that they "got it" re: executive compensation (how it's possible that this question wasn't anticipated and well prepared for is beyond me) was stunning.

Their poor performance aside, the hostility of the questioning was also a testimony to the sentiment that still exists towards the domestic car industry in general, including some perceptions that are clearly outdated. I do find it ironic that members of Congress could not get past this emotion, when they agreed with very little debate to bail out the even more egregious financial services industry---if you want to see really lavish living on abysmal performance, go to the Hamptons and not metro Detroit. But, I really don't see how any of the Big Three heads earned even half their salaries this past week. In the parlance of Jack Welch, they all acted like "C" players.

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