With the outcry over the bonuses bankers were receiving while being bailed out, there's growing murmuring by taxpayers over the outrageous bonuses being paid union workers working at the failed automakers General Motors (NYSE:GM) and Chrysler, which awarded them with bonuses while they still owe taxpayers big money.
Taxpayers still, unfortunately and wrongly, own part of GM and Chrysler while they deem it within their power to hand out these bonuses.
GM said they're paying out $3,200 to each worker, while Chrysler is paying out $750. That money should be used to pay back us taxpayers and not the overpaid union workers which were part of the problem in the first place.
With Ford, they have every right to award what they want to their workers, and they did with each hourly worker getting $5,000 each in profit-sharing for 2010.
The difference is Ford (NYSE:F) leadership refused to take the government handout which taxpayers opposed, and rightly took the situation into their own hands and overcame the difficult economic challenges they faced.
Ford workers deserve their bonuses as they and the company performed admirable. GM and Chrysler workers don't and the companies should be under fire for their irresponsible and unethical decisions.
The government should have allowed them to fail, and as usual, allow the free market to pick up the pieces of the poorly run companies. That should have happened with the banks and other financial institutions as well.
That's the greatness and power of the free market. It eliminates the poorly run companies via customers making decisions and voting with their dollars. For the government to step in and circumvent the decision of consumers is outrageous, unethical and props up the weak companies and allows them to continue on with their poorly run businesses.
Ford and its leadership and workers deserve praise for bypassing the government handout, which resulted in the workers being rewarded while Ford continues to pay down its debt.
For GM and Chrysler to continue to be allowed to survive is wrong and shouldn't have happened. But to throw it in the face of taxpayers who were forced by the U.S. government to bail out the failed companies by offering the workers of the companies bonuses is not different than the ridiculous bonuses paid to bank executives while their companies were failing.
Monday, February 14, 2011
Where's Anger Over GM (NYSE:GM), Chrysler Worker Bonuses?
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5 comments:
Again! Some ignorant fool doesn't understand what happened. Ford was there begging for money as did almost all car companies across the world. General Motors borrowed money from the government that is being paid back. Banks received free money that will never be paid back. If GM failed then so would have Ford. Remember, even good ran companies were and still are hurting for money. It was much less damaging to let GM restructure than liquidate. I agree with you on one thing, GM was poorly managed but that doesn't mean that the employees of GM are worthless. There's nothing special about Ford workers. Ford was facing bankruptcy 4 years ago but was able to be saved by banks. When GM needed it, the banks were strapped, so we got loans from the government. By the way, show me one of your pay stubs that shows a deduction for GM and then I'll say OK. Other than that, you or any other taxpayer hasn't paid a cent toward GM or ever will.
I blame that bad ole Obama.
I agree with Anonymous.
General Motors stakeholders (workers, management, bondholders and shareholders) paid a high price for US and Canada's help.
In comparison, AIG received a credit line of over $100 billion (that is more than double what GM received). AIG shareholders did not loose all, the share price of AIG is now over $40. (old GM share price is now 9 cents). AIG bondholders were have now recovered 100% of their investments. (old GM bondholders are still in BK with hope to recover more than the 30 cents on the dollars their bonds are now worth).
The author shows a lack of sensitivity to GM stakeholders. And I feel sad to read such an article more than 2 years after the company bk restructuring.
The article does nail one point. GM is paying bonuses with borrowed tax payer money to overpaid union labor. Union labor rates have run most industry out of this country and have made the US less competitive in the world market. Argue that point however you wish, paint it up and sugar coat it if it makes you feel better. But it's the truth. Do you see the Germans, Koreans, or Japanese locating plants in union strong hold states? Inflated labor rates, the union politics and overall cluster F, with a large F, that unions create in industry are killing our country. Paying workers bonuses when they've contributed to the overall good of the company is a good thing. Over paying that worker because the union bosses extorted the company is wrong.
Anonymous:
Before referring to people who you disagree with as ignorant fools you should acquaint yourself with some basic facts lest you betray your own ignorance. GM received a federal bailout in the amount of $50 billion beginning in early 2009 and still owes $27 billion. Where do you think that money came from, the tooth fairy? No, it came from taxpayers, many of whom are struggling to make ends meet and are not receiving bonuses from anybody. If GM managers and workers had any sense of decency, they would fully pay off their debts to the people who saved their jobs--the taxpayers-- before awarding themselves bonuses. Greed is greed whether it involves AIG or GM.
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