GM Plant Closings...St Catherine?

[Steve Pettit]

Re: Having been there,

I think he meant 1/3 the top management salary. I think 1/3 of that would be a pretty substantial amount. I'd give it a shot shight unseen.

Steve

[Chris H.]

Re: Having been there,

Yes, but would anybody hire you with your qualifications even at 1/3 the salary?

[George J.]

Re: The core problem

I think you will find the entitlement mentality in many smaller American companies today, also. In my company you wouldn't believe the attitudes when the employees received a smaller "bonus" a few years ago. It was like we were cheating them out of something by not giving them as large a bonus. The next year when there was no bonus it was worse, even though the sales numbers are posted on the wall chart every month. They could not make the connection between lower sales and a bonus. It was a real eye opener for me.

George

[John H.]

It Works Both Ways...

Plenty of good stuff in the preceding posts, but the system for "Management" works both ways. As an assembly plant manager, part of my incentive compensation package was stock option grants if my plant met/exceeded our targets for Safety, Quality, Cost, Delivery, and Morale (and in Manufacturing, you're measured against those goals every single day).

During the two years after the DaimlerChrysler merger, my team continued to exceed our assigned goals (as they had prior to the merger), and at the end of those two years, the incentive compensation committee awarded me around 52,000 options. Had we not exceeded our goals, no award would have been made.

Stock options are very simple - "legal" stock options are granted at the market price on the day they're awarded, and if the open market NYSE stock price is higher than that three years later (the earliest any can be exercised) and you choose to exercise them, you get the difference between the original award price and the current market price; they expire five years from the award date - if you don't exercise them by then, they disappear.

As luck would have it, the options were granted at the then-current price around $75 per share (down somewhat from the earlier euphoria-driven $98 price immediately following the merger, and I got some of those too). Three years later (earliest possible exercise date), the stock had sagged to $35-$40 per share as auto stocks had become "unpopular", and has wavered around $45 or so for the last year.

My options expire in February, and as there is little likelihood of the stock skyrocketing up another $30 per share from its current level in the next ten weeks (in spite of solid profit performance and smash hits like the 300, Magnum, Charger, and the Challenger that's coming), I plan on having a nice trash fire in February when they expire for good.

Just pointing out that "incentive compensation" can work both ways - the only ones you read about in the media are the few that went the other way, or the ones where Boards of Directors granted mountains of options at well BELOW market price (otherwise known as the "Enron Method"). "Risk and Reward" is a great motivational concept in principle, but it doesn't always work out the way it should.

[mike cobine]

Re: It Works Both Ways...

You need a company tht extends your 5 year option to 10 years when they realized the market is making everything go underwater.

[Rick S.]

Re: It Works Both Ways...

John,
Thanks for the stock option education. It gives me a better understanding of the inner workings of management compensation. Do you know if that same formula (3yr-5yr) is the norm for management above your level? Have a happy Thanksgiving and see you Sat. 12-3-05
Rick

[Curtis L.]

Re:John,trade ya for my ford stock.. *NM*

[Dick G.]

Styling Styling Syling Styling SELLS

I am NOT a Mopar fan but. PT cruiser is a POS but sells because of styling with competive price. Pontiac GTO with 400HP and its boring styling looks like a rendition of a Grand Am. $35000.00. I heard some time ago its sales were bad. Poor styling. I hope and pray GM can get through this tough time. Even if they move their assy. plants offshore they still need to change their styling methods. Styling is like the Larry Shinoda's. It takes a visionary type of artist to make it work. Thanks My 2 cents

[lyndon sharpton]

Re: Styling Styling Syling Styling SELLS

you are so right! that is what they have lost sight of. they GM think they can just slap a emblem on an it will sell GTO! look what ford did with new mustang, selling like on fire. people are buying because of Styling Styling..now the SSR was seling fast but it is way to much money. the HHR is selling for now.. but if they were to bring back the camaro/firebird in a reto styling it would sell like hot cakes!. but not some rebaged POS from down under like they did with GTO for 40k. styling still sells, not just engnering! even the new C6 could have been better in the styling dept, not all of us want to drive 190 mph! it is like all of GM is scared to push styling, since bill mitchell GM has lost it the last 20 years are so. it did not happen over night. need to get back to the roots an that my friends is STYLING, an i dont think wellborn is the man!

[Donald M.]

Re: Styling Styling Syling Styling SELLS

Dick, Yes, styling sells. The SSR is a disaster! Thirty-five grand for a convertible pick-up truck that you can't carry anything in! Truly, "the answer to a question that nobody asked". The GTO is just as bad. They take a Vette engine, drop it in a Aussie grocery getter, make it look like a 2 year old Mitsubishi and charge 38K for it! What were they thinking??
As a GM retiree,nobody is more concerned about GM than I am. I have been through some pretty tough times with GM during my 32 years with them, but nothing like this. It's going to take some very tough decisions for them to recover from this current situation.They should replace the entire design staff, hire new people with some guts to be different (and maybe even a few that remember the ORIGINAL GTO, Camaro, Firebird and yes,Corvette). Put the accounting dept. in an abandoned warehouse somewhere and only let them out on Christmas.

[Rick S.]

Re: Styling Styling Syling Styling SELLS

I agree that styling does sell and that is the major selling point for me when it comes to buying a car (always GM). But how can Toyota, Nissan, etc sell all those cars when there is no styling to their products. They all look alike, the family sedan, the SUV. Hell, it's hard to tell one from the other when driving alongside one. Happy Thanksgiving.

[G B.]

Follow the money

It's not that GM cars don't sell. They do. It's not that GM isn't producing cars of high quality. They are. The problem is that GM can't make a profit selling the cars they build at the current market price for them. That means GM must quickly lower their cost of being in business or they will go broke.

You can talk all you want about how good things were in the old days when GM had weak domestic and foreign competition. You can also preach about how the Capitalist Running Dog Management Idiots forced the workers to be overpaid by caving in to UAW extortion. But it still comes down to making money in today's market if GM is going to survive as a company. That will require changes that are financially painful to the stockholders and the current / retired GM employees. I seriously doubt these groups will tolerate what is necessary without the force of a bankruptcy.

[Donald M.]

Re: Follow the money

Jerry, belt tighening, like leadership, must start at the top. When I see top management drastically reducing their multi-million dollar salaries,bonuses, stock options, etc. then I might be a little more willing to participate and I'm on a fixed income.

[Clem Z.]

GM spends too much time in the wind tunnel

when they design their cars. the shape never changes even the new G-6 pontiac looks like pontiacs of 4-5 years ago. being a car guy the only way i can tell the new G-6 is because it hade "G-6" on the deck lid. the new D/C car are as aero as a 4X8 sheet of ply wood but when you see them a block away you know what they are. no one wants to spend big bucks for a new GM car and unless you change the color the neighbors will never know you got a new one. i buy the same color corvette all the time so the neighbors don't talk.

[Curtis L.]

Re: vehicle durability

GM has many problems that follow them, Quad 4cyl, 6.0 wristpins, intake manifolds, lock up torqconverters, falty turn signals at $400 a pop. It's not styling that is killing them.I am GM all the way, own many vettes and 02 yukon. BUT how many of u GM owners can say u put 100,000 miles on your vehicle and only changed the oil!!!!!! That is what the imports have over GM and ford. The list of GM mechanical problems goes on and on.I own a used car dealership and it costs me 1/3 less to set up an import then a domestic, and I sell more used imports then domestic because the public believes they are more reliabe..FACT.In the last week alone this is what I have had to deal with,01 montana bad lock up torq converter, 98 mustang gt cracked intake (PLASTIC),99 yukon leaking intake, 99 tahoe signal swicth,01 ford ranger head gasket,98 grand cherokee bad rear end.Thats just in the last6days. Needless to say my tech loves the domestics...........This is a major part of the real problem for domestic auto makers.I can not forget about dodge, the trannys and suspensions on trucks are JUNK, and they are worth 1/3 less than GM or Ford at trade in time. I could go on and on because I dealt with them every day for the last 27 yrs. Boy, sorry guys I get wound up. Have a nice Thanksgiving everyone.