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Auto Industry CEOs to Reduce Salaries If They Get Bailed Out

Two weeks ago, the CEOs of Ford, Chrysler and GM requested a bailout, and were denied. Many protested the fact that they had taken their private jets to Congress. But this morning President Alan R. Mulally pledged to reduce their salaries to one dollar if they got a bailout. Ford added that they plan to cancel all management employees' 2009 bonuses, not increase salaries for North American employees and sell the five corporate planes. GM's CEO pledged to get rid of the companies' seven planes as well.

E.J. Dionne, of the Washington Post Writers Group writes:

There is a paradox at the heart of the proposed bailout of the auto industry. The rescue would have no chance of passing without the muscle of the Big Three's unionized workforce. Yet you can't turn around without hearing someone trash autoworkers for the terrible crime of trying to earn a decent living.

...if this bailout happens, it should reflect the core reason it will pass: Long-term economic growth depends upon a well-paid middle class (and that definitely includes autoworkers) with real purchasing power. If saving our auto industry means moving GM workers ever closer to Wal-Mart wages, the bailout isn't worth doing.


With regard to the bailouts in general, a New York Times editorial had this to say:

The federal government is going for broke in an attempt to avert the type of calamitous financial collapse that led to the Great Depression. No one would fault the objective, but throwing money at the problem is becoming an end in itself...

Even as the rescue tab rises, taxpayers are not being adequately informed or protected. There is as yet no effort to deal effectively with the underlying causes of the problem, especially mass mortgage defaults that feed bank losses. And officials seem to think urgency to act absolves them from considering the longer-term implications of the actions they take.


What do you think? Does the auto industry deserve a bailout? Should other companies such as Citigroup be required to cut salaries and other costs as well? Let us know in your comments.

Posted by Natasha G on 12.02.08
22 Comments   add a comment >>
Rita B.
Sunday December 7, 2008, 7:51 PM


The oil companies should have to pay for the bailout for the auto companies since I am sure they played a big role in encouraging them to build the gas guzzlers. The oil companies have made huge profits and also played a big part in out invading Iraq. They owe the American people big time. All of the CEOs of AIG, Standard and Poors, Moodys, The big investment houses - they are all a bunch of greedy crooks. They should all be in jail. Instead our spineless Congress gives them the biggest bailout in the history of our country.

Marie K.
Saturday December 6, 2008, 8:54 PM


The only purpuse that car industry serves is not just to charge us outrageous prices, and provide us with what they want, (gasoline cars). We have been asking for year for electrical,and natural gas cars, and because of politics we have been ignored. We the ones that pay for it! Since none of the 3 big companies have provide the public with the environmental cars that we have being asking for years,they do not serve the purpose, and do not deserve to be there. To let them desapear will serve as a most needed lesson.We all need a achange .For sure we will have other competitive companies opening up,that will provide us with most needed "green" cars, and jobs for the desplaced workers that really will serve the intended purpuse.

The big corporations need to learn a lesson, in ethics, because is not just to have huge privileages and not resposabilities.

ronnie e.
Thursday December 4, 2008, 9:46 PM


You want my opinion. I don't think they should be entitled to a buy out. Let them restructure like the rest of America is doing. Their situation hasn't occurred overnight. Our economy has been nose diving consistently in the kamode for the last 4 years...But they all continued to build these fancy gas guzzeling pig of SUV's. Did they actually think Americans could afford $100 fill up on these poor mileage vehicles, let alone afford them? DEMAND them scrap it all and build steam and solar motors!
Christmas...Time for family, friends and fun. I am a single mom of three teens. I have been unemployed since the September before last, exhausted my unemployment and have no income. I have two degrees and have been unable to even attain a part time position. Christmas has always been special to me because I enjoy giving gifts and sharing the happiness. All I would like for Christmas myself is a permanent lifer position-preferably in the Graphics Industry, just so I can care for my family and enjoy what I do for a living. You don’t happen to have an open position, do you? I am quite distressed this year because not only am I falling behind in my bills, but I will have nothing to share with my children, family and friends this holiday season. It is quite depressing. I was planning on Green gifts this year that would protect the environment, save money, are re-useable and are made from the heart. It all takes money, none of which I currently have. The amount of stress I endu

patricia r.
Thursday December 4, 2008, 7:58 AM


As Michael Moore said in so many words. "Do we really think the Big Brave Congress, you know the ones who wouldn't stand up to to a disgraced president nor turn down a single funding request for a war that neither they nor the American public support are going to come to the rescue of the American wage earner?"I say were these conscientious guardians of our tax dollars asking alot of questions when Wall street came begging for 700 trillion? Were we the people told to be interested in how the fat cats got to Washington? Was it by Plane, Train or Automobile? No Now congress wants the Big Three to "dance" for the money. And they want us to believe what, that WE caused the problem by earning too much money? Union jobs are about the only jobs that have kept up with the cost of living. Costs that were drove sky high by trading securities like baseball cards up on wall street where the value was determined by holding a card to their forehead and proclaiming to see endless profits. Wall Street tore this country down with the abuse of credit. The Automakers at least sell something tangible . Jobs for Americans are tangible too. We won't be buying too many cars in the near future of any make or model. You can't buy without money or credit. And for anyone who thinks the wage earner is to blame, don't worry, I believe your wish is about to come true. We will all be working for peanuts and glad to get it I guess. I just wonder who is going to pay for all the greed? It won't be us.

Elaine H.
Wednesday December 3, 2008, 6:55 PM


I was glad to see that the auto CEOs were enough in touch with reality to give up their obscene prior salaries and bonuses. I would like to have any bailout dependent on pledges to meet the fuel conservation requirements by 2015. Also, that the money would support the number of jobs now at risk ONLY IN THE UNITED STATES. I can't imagine that they think we would capitalize their factories in Mexico, China, and elsewhere.

Lillian Kestone-Fazzi
Wednesday December 3, 2008, 11:05 AM


I don't think they should get any aid from the government.

1. They were running the companies for their benefit alone.

2. As CEO's they know what makes money and what will not. They knew that investing into bigger vehicles was a short term policy that they world have to change, sooner or later. They also know if it is ethical or not. By giving people bigger, dirtier and more expensive vehicles, the companies were being unethical.

3. It is time to change the engine to meet modern times, no engine is dirtier than a car engine. The technology is here to give the people what they need and should have, electric vehicles are available today in other parts of the world. Why don't we have them here? Because we are told we need a bigger car. Having a dirty car that pollutes, does not create jobs. We need to change the way we think and put the earth, our health and be fair and ethical in every way and to everything. If we live our lives in an ethical way there will be no need to get bailed out of anything. When a bad company goes under it opens up a place for a good one to come in and take it's place. We will always have jobs. We might have to learn new skills in order to get the new job and that is part of living and learning.

For our sake I don't want this bail out, it will only bring us more debt, higher taxes and more global warming. This will harm the middle class, not help us.

ronnie e.
Wednesday December 3, 2008, 9:59 AM


that's really gonna make a difference...it's their CEO's that got them where they're at now. i believe that this job position should be eliminated! 1000's of these so called CEO's have been making billions on these bail outs. i know the now extinct middle class has worked alot harder than these elite accountants and we haven't received any bailouts. look at GM for example...they took their 10 top executives and let them buy into an early retirement, paying them all over 10 million each! and now they want more money? they should have used that money to start building electric and steam powered cars. this is unfair and unethical. they are where they are because they caused this mess. they have bought all of these pattons to build green vehicles and filed them away, not utilizing them. i am a single mom, unemployed for a year and a half now, have exhausted my unemployment and have no income, all of my utilities are two months past due. this month is christmas and i have nothing except the worry of everything in my home getting shut off. merry christmas to all!

Margaret W.
Wednesday December 3, 2008, 8:59 AM


They should all be fired. They are simply in bed with all the oil companies in order to keep us buying more and more toxis, environmentally destructive fossil fuels.

Margaret W.
Wednesday December 3, 2008, 8:57 AM


They should all be fired! They're simply in bed with the oil companies to make sure we need to keep using more toxic, environmentally destructive fossil fuels.

Rosalind R.
Wednesday December 3, 2008, 5:56 AM


Hopefully the $1 a year w/be for at least 3 yrs; let them live off their huge bonuses and salaries from past yrs. And make new smaller dependable cars that buyers need/want and with affordable pricing. Discontinue some of the larger car models/lines. Admit past mistakes and correct them. I do NOT want to see them not survuve but things HAVE to Change.


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