awsome....
the amount of money the senior managment and owning and opporating corp aircraft is just a drop in the bigger bucket of the overall issues with the big 3... true it didnt help there cause with there hat in hand begging for TARP money.. selling the jet and the few million a year cut in pay for the top brass still isnt going to fix anything... there are ALOT bigger issues that run alot deeper then privet jets and exectuive pay...
csx engineer
csxengineer98 awsome.... the amount of money the senior managment and owning and opporating corp aircraft is just a drop in the bigger bucket of the overall issues with the big 3... true it didnt help there cause with there hat in hand begging for TARP money.. selling the jet and the few million a year cut in pay for the top brass still isnt going to fix anything... there are ALOT bigger issues that run alot deeper then privet jets and exectuive pay... csx engineer
csx
I agree with you but the first step to start from the head.
Awesome! csxengineer98 awsome.... the amount of money the senior managment and owning and opporating corp aircraft is just a drop in the bigger bucket of the overall issues with the big 3... true it didnt help there cause with there hat in hand begging for TARP money.. selling the jet and the few million a year cut in pay for the top brass still isnt going to fix anything... there are ALOT bigger issues that run alot deeper then privet jets and exectuive pay... csx engineer csx I agree with you but the first step to start from the head.
So what would you do to the head?
As a LONG time reader of TRAINS, I can remember all the articles and editorials from the time of the eastern bankruptcys-formation of Conrail. I think some of us are missing an important difference between the rail problem and the automobile crisis. The railroads were bankrupt first, then combined by government fiat, and when the required government subdidies became a major drain on the taxpayer, the rules of the game were changed to allow management to try to make money. I believe that in the latter they succeeded.
The automakers are not bankrupt yet, and although I have not been able read as much about the aurto bussiness (my CARS subscription expired) I do not think the auto companies or the unions are ready to go through all the gut wrenching changes that affected the rail sector to achieve the success the rails have today. And to be fair, I am not sure the rail sector would tolerate those same changes today.
How about some truth about that corporate jet? The congressman who asked for a show of hands of the CEOs who flew commercial was grandstanding. The corporate jet is not a luxury, it is a necessity. Those CEOs did not go to Washington alone. They were accompanied by by a cadre of vice presidents, bankers and secretaries, every one essential to the job at hand.
Now imagine trying to book on short notice, maybe 10 seats on a commercial Detroit to DC flight. Then imagine conducting a business meeting while en route. And don't forget, your two competitors are on the same flight with you. It just won't work. And it isn't just the flight. There is also the hassle of getting to the terminal an hour or more ahead of departure (wasted time), limits of carryons, TSA inspectors rifling through your laptops and hand bags etc.
The corporate jet is a business tool that pays for itself by saving time, maintaining security and allowing execs to keep up to the minute information. A lot of productive work is done while in flight because a CEO's most precious commodity is time. The smart and successful ones make the most of their time.
yes..time is money..so why not connect via tele conference? I own a business and agree that time in travel is so much wasted time...so...I communicate over the phone and via email. The auto execs can do the same. Orrrr...maybe they can carpool in own of their own cars...maybe a limo if need be so Mr. Important can get some work done in the back. But a private jet with your hat in hand asking for money? That's a bit over the top..
UlrichBut a private jet with your hat in hand asking for money? That's a bit over the top..
It was supposed to be over the top.
Despite how it appears, the government is just salivating over the possibility of getting its hands on the U.S. auto companies through the pretext of a bailout. That motive is the basic reason for the constant propaganda that the auto execs are raping the companies and building cars that nobody wants. But for public consumption, congress has to walk a very fine line. On one hand, they can’t admit that they want to nationalize the auto industry, and on the other hand, the public is going to think it is wrong to bailout an industry that has been so thoroughly demonized by congress and the media.
So for this bailout to be approved by the public, there needs to be a public flogging of the auto execs. So congress and the execs have put on a theatrical production whereby the execs arrive in their fancy jets, living high on the hog, and congress cuts them down to size to satisfy the publics’ appetite for revenge. They even tipped off ABC News so they could unwittingly play a part in theatrics by believing that they had gotten an inside scoop on the hypocrisy of the execs arriving in private jets begging for money.
Ulrichwhy not connect via tele conference?
Yeah, next time your are subpoenaed to testify before Congress, tell them no, I won't be coming, but I would be happy to give you a call.
Teleconference has its place, but in many cases there is just no substitute for face-to-face meeting. A lot gets done in a social setting - be it lunch, dinner, the golf course or at 30,000 feet.
But just to bring the railroad back into this, I'll propose the execs trade their jets for private rail cars. They could charter a whole train and expand their entourage. And if work gets done in a couple hours aboard the jet, just imagine how more productive they would be overnight on the rails. It would be fuel efficient - to the joy of the greens - and maybe it would pave the way for regular Amtrak service between Detroit and DC. What's not to like?
Bucyrus UlrichBut a private jet with your hat in hand asking for money? That's a bit over the top.. It was supposed to be over the top. Despite how it appears, the government is just salivating over the possibility of getting its hands on the U.S. auto companies through the pretext of a bailout. That motive is the basic reason for the constant propaganda that the auto execs are raping the companies and building cars that nobody wants. But for public consumption, congress has to walk a very fine line. On one hand, they can’t admit that they want to nationalize the auto industry, and on the other hand, the public is going to think it is wrong to bailout an industry that has been so thoroughly demonized by congress and the media. So for this bailout to be approved by the public, there needs to be a public flogging of the auto execs. So congress and the execs have put on a theatrical production whereby the execs arrive in their fancy jets, living high on the hog, and congress cuts them down to size to satisfy the publics’ appetite for revenge. They even tipped off ABC News so they could unwittingly play a part in theatrics by believing that they had gotten an inside scoop on the hypocrisy of the execs arriving in private jets begging for money.
Bucyrus, as a stalwart free marketeer does it not bother you at all that the same executives you are so vigorously defending were standing in front of Congress with palms open looking for a bailout with the public's money (including some of yours)????????
Forget the private jet non- issue, if your socialised car production scenario comes to pass wouldn't those CEO's be co-conspirators?
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
carnej1 Bucyrus UlrichBut a private jet with your hat in hand asking for money? That's a bit over the top.. It was supposed to be over the top. Despite how it appears, the government is just salivating over the possibility of getting its hands on the U.S. auto companies through the pretext of a bailout. That motive is the basic reason for the constant propaganda that the auto execs are raping the companies and building cars that nobody wants. But for public consumption, congress has to walk a very fine line. On one hand, they can’t admit that they want to nationalize the auto industry, and on the other hand, the public is going to think it is wrong to bailout an industry that has been so thoroughly demonized by congress and the media. So for this bailout to be approved by the public, there needs to be a public flogging of the auto execs. So congress and the execs have put on a theatrical production whereby the execs arrive in their fancy jets, living high on the hog, and congress cuts them down to size to satisfy the publics’ appetite for revenge. They even tipped off ABC News so they could unwittingly play a part in theatrics by believing that they had gotten an inside scoop on the hypocrisy of the execs arriving in private jets begging for money. Bucyrus, as a stalwart free marketeer does it not bother you at all that the same executives you are so vigorously defending were standing in front of Congress with palms open looking for a bailout with the public's money (including some of yours)???????? Forget the private jet non- issue, if your socialised car production scenario comes to pass wouldn't those CEO's be co-conspirators?
Oh I am absolutely opposed to the bailout—this automaker bailout and all the others past and proposed. They are truly milestones on the road to ruin. They are an overthrowing of our free market system. If I sounded like I was defending the auto execs, I did not mean to. My complaint is the widespread misinformed perception that the government is like some benevolent king with a lot of wealth who will help those in need if they approach with humility. The point I want to make is that congress in this scenario is far more opportunistic, disingenuous, greedy, and self-serving than the auto execs. In other words, congress wants the bailout more than the auto execs. If that sounds like I am defending auto execs, I guess that is an unintended consequence. And I do agree that if nationalized car-making results from the bailouts, the auto execs will have been as complicit as the government. They ought to be careful of what they wish for.
soilredneckAs a LONG time reader of TRAINS, I can remember all the articles and editorials from the time of the eastern bankruptcys-formation of Conrail. I think some of us are missing an important difference between the rail problem and the automobile crisis. The railroads were bankrupt first, then combined by government fiat, and when the required government subdidies became a major drain on the taxpayer, the rules of the game were changed to allow management to try to make money. I believe that in the latter they succeeded.
tpatrick Ulrichwhy not connect via tele conference? Yeah, next time your are subpoenaed to testify before Congress, tell them no, I won't be coming, but I would be happy to give you a call.
Or...suggest a cheaper mode...apparently the congressmen were not expecting three separate private jets.
What really surprised me is that none of these guys had a business plan to present. Congress had to ASK for a plan...apparently these execs flew down there expecting bailout money without even a plan presented. I guess maybe that's why SMALL business can thrive...I wouldn't think of asking for a LOAN without a detailed plan (along with accounting statements and projections) let alone bailout money. These guys must be from another planet.
Asking for a plan seems to me to be political grandstanding. Any realistic plan has to contain labor cost reduction/containment, and I don't think this Congress is capable of considering a plan that does that. Just as at times in the past budgets have been pronounced "dead on arrival" any plan that attempts to deal with the core problem is going to be DOA.
There might be a parallel here with railroad's labor costs in their highly regulated era. I'm not very familiar with the subject, but it would seem the cleanup of the Penn Central mess and reduction of crew size occured in much the same time period. Am I correct, and if so is there some lesson that could apply to the auto companies?
Ulrichtpatrick Ulrichwhy not connect via tele conference? Yeah, next time your are subpoenaed to testify before Congress, tell them no, I won't be coming, but I would be happy to give you a call. Or...suggest a cheaper mode...apparently the congressmen were not expecting three separate private jets. What really surprised me is that none of these guys had a business plan to present. Congress had to ASK for a plan...apparently these execs flew down there expecting bailout money without even a plan presented. I guess maybe that's why SMALL business can thrive...I wouldn't think of asking for a LOAN without a detailed plan (along with accounting statements and projections) let alone bailout money. These guys must be from another planet.
Dakguy201Asking for a plan seems to me to be political grandstanding. Any realistic plan has to contain labor cost reduction/containment, and I don't think this Congress is capable of considering a plan that does that. Just as at times in the past budgets have been pronounced "dead on arrival" any plan that attempts to deal with the core problem is going to be DOA. There might be a parallel here with railroad's labor costs in their highly regulated era. I'm not very familiar with the subject, but it would seem the cleanup of the Penn Central mess and reduction of crew size occured in much the same time period. Am I correct, and if so is there some lesson that could apply to the auto companies?
As far as rank and file salary goes, sure UAW people make good money otherwise how would they pay for their homes, cars etc? As far as the execs it is always the same story just like back when i was railroading, cut the blue collar guy. I have said before when a loaf of bread is a buck then we can all make 10$ per hour. One last note most of the execs have stock option plans so they will make out in the end.
If it is too big to fail, it needs a bailout with taxpayer money. We ought to start asking for proof of two things.
1) Prove why something is too big to fail.
2) Prove it will fail.
I just learned that the total bailout tab so far is 7.4-trillion dollars, which is equal to half the value of all goods and services produced in the U.S. last year.
http://saveyoursavings.blogspot.com/2008/11/74-trillion.html
And we are heading into a new era of even bigger things. We have a massive new public works/infrastructure/jobs program gathering steam with a modest start up cost of 700-billion dollars being tossed around.
Maybe we should wait until things fail rather than bail them out because somebody says they will fail.
Maybe we should not allow businesses to get too big if it means they can extort money from the taxpayer once those businesses have grown too big to let them fail.
We have come a long, long ways from one year ago when we were assured that no taxpayer money would be involved with the modest housing rescue plan being proposed then.
They should let them go bankrupt and from that point on alternatives can be explored as part of the restructering that is required anyway. I personally don't want a bailout, but if it must be then it should come with alot of strings attached, public scrutiny, and accountability.
sanvtoman One last note most of the execs have stock option plans so they will make out in the end.
One last note most of the execs have stock option plans so they will make out in the end.
One small matter that makes one wonder about that; what if the stock options are worth nothing?
piouslion1 sanvtoman One last note most of the execs have stock option plans so they will make out in the end. One small matter that makes one wonder about that; what if the stock options are worth nothing?
Good question...owning stock in a bankrupt company?...doesn't sound that great to me.
UlrichI personally don't want a bailout, but if it must be then it should come with alot of strings attached, public scrutiny, and accountability.
I agree, but we have already spent, or committed to spend, 7.4-trillion dollars on bailouts, and there doesn’t seem to be any strings attached, public scrutiny, or accountability attached to that figure, which is 296 times greater than the proposed auto company bailout. It is like the government is creating mortgages for us without our consent. I wonder how much each taxpayer’s portion of 7.4-trillion dollars is. Since the figure is half of our annual GDP, I guess you could roughly quantify it as half of what you made last year. So if you made $100,000 last year, the government has just, in the last two months, created a $50,000 mortgage for you to pay off; and you don’t even get a house for it. And we’re just getting started here.
There is another factor that is missing in this comparison between the Conrail revival and the automakers in their present predicament.
Is there an L. Stanley Crane somewhere in the wings to run the place(s) when the present management shows itself unable or unwilling to make the hard choices that go with remaking an industry or company. This brings us to probably the heart of some of what we are speaking of. The politicians said they wanted a business plan from the big three. This is from people that voted to bail out banking and investment houses with no knowledge of what they were voting for, and now they want a business plan (one does have to admire their kuspa or is gaul a better word). The truth be known is that it will take a lot of courage and strength of a seasoned executive with a lot of help from those that respect the position and appreciate the work and responsibility that goes with this kind of work out to get the three back in order.
Speaking as one that has seen and been a part of Corporate America for over 30 years, it can only be said that the errors and omissions of the 70's and early 80's in the world of deregulation, easy money, and free wheeling irresponsibility of both industry, commerce, and even the general public have come home to roost.
A few matters that prove this:
1. From the 70's & 80-'s Deregulation: Regulation was ignored and had its place taken by uncontrolled competition. Regulation has its place to keep order in the market place and in the nation (we are at last look still a nation under the rule of law).Even J.P Morgan, Jim Hill, Edward Harriman, and even Andrew Carnegie knew that and pretty much obeyed the rules that were there.
2. From the 80's & 90's:The family house is not a private piggy bank to dispose of your equity and pay for the money twice. (They are called Home equity lines of credit or HELOC's to those in the banking industry). No one told anybody that you did not have to borrow that money or that if you borrow it you have to pay it back.
3. Wages, Pensions, fringe benefits and votes for a politician: are not reasons in and of themselves for a company to stay in business.
4. Automobiles companies are just that, publicly owned by stockholders people and institutions that have taken a risk on the companies management abilities and good craftsmanship of the workers to make a profit for them (If anyone is disappointed that group is at the head of the line. They put their money to work in companies that are determined to keep afloat not by their own abilities but from political and monetary loans courtesy of Uncle Sugar.
5. Let the market rule on this one. Nobody came to Studebakers, Bon Vivant Soups, Wang Laboratories, or Union Pacific's rescue. Yes you read right Uncle Pete was bought out of receivership (another word for bankruptcy). One of the four failed outright, two were absorbed, and we all know about the fourth.
My 2 cents
PL
That could happen but I really doubt it.
I would not put down Mr Crane, but if you think about it any competent rail exec could do the same. The reason Mr Crane succeeded IMHO is because he was able to slash the workforce and shed redundant track and routes. I think everyone knew what the problem was it was just nobody had the authority from the Government to do it.
sanvtoman competent
competent
That rare quality often so much needed yet so hard to find. By some chance is there one of such quality that could do the same for GM, Ford & Chrysler? The problems and challenges may be different, but challenges and problems they are still.
What would a competent leader do for the auto companies to put them in the black? It seems to me that their overhead cost is higher than that of their competition. So a competent leader would have to lower that overhead cost. How would a competent leader do that?
The car companies have made great strides in cost-cuttnig. Unfortunately, they kissed up to the unions and didn't cut in the cost savings until next year. With bankruptcy they can speed up these changes.
The car companies will be in the black in a year or so. Their fear now is that they run out of cash to loan to you and I to buy the cars they have on the lots. If they cannot find cash to loan us, they will not sell a single car.
Let them go into bankruptcy, rewrite these ridiculous union contracts, start loaning us money, and off they go.
Why not give the employees a couple of cars each year instead of salary? Turn the tables on the employees. If the product you make is so good, union assemblers should have no problem selling the cars.
One thing I was surprised to lean from a Canadian rail worker is that the non-union auto plants in Canada pay around 24$ per hour. Toyota and Honda is what he was referring to. The main savings in Canada could be helped because of national or socialized health care. But that is a another topic.
Folks:
I think we are about to see a point made.
I do like this thread,
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