LA Connection Property Blog: General Motors and Rick Wagoner's $20 Million retirement package.

General Motors and Rick Wagoner's $20 Million retirement package.

In May 2008 in the midst of record oil prices, I blogged about General Motors and questioned why GM failed to aggressively market and promote their electric car, the EV1.

I also asked why General Motors refused to allow the drivers of the EV1 to purchase their cars at the end of their leases, and why these vehicles were physically destroyed by General Motors?

Fast forward to March 29, 2009 - Rick Wagoner resigns as the CEO of GM under pressure from the Obama administration. Wagoner had previously stated that the worst decision of his tenure at GM was "axing the EV1 electric-car program and not putting the right resources into hybrids.

It's therefore interesting that Wagoner will receive a retirement package estimated at $20 Million. And this is for someone who led GM while it suffered it's biggest losses in it's history and brought it to the brink of bankruptcy .....?

If GM needs additional bailout funds to pay its day-to-day expenses, won't the company be using "bailout funds" to pay this unworthy retirement package?

Comments

It appears they were playing the Obama socialist card.....and got trumped. Let the bankruptcy system clean up this mess, as bailouts will delay the inevitable.  Their whole business model is a mess........

Posted by TIM MONCRIEF, Over 2,000 homes sold….. (Tim Monciref) over 11 years ago

I am pretty sure at some point in history it will be made more apparent that the oil industry has long paid the car industry not to produce electric vehicles or increase mileage.

Posted by Shane OnullGorman, Eau Claire Wisconsin, Real Estate Agent & Realtor- Buy or Sell (Eau Claire Realty, Inc.) over 11 years ago

This was not a bonus it was a contractual obligation to a man with 31 years of executive service to GM! Are contractual obligations only required to be honored for dues paying liberal voting UAW members?

More money into the EV-1 would have been good politically, but money into cars people want to buy was more important! GM has been building cars that limousine liberals demanded and fewer buyers wanted for years! There was a time when GM cars were the ones people wanted and GM was number one.

Bill

Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) over 11 years ago

Stewart:  Ummm... where can WE go to sign up for a similar package ?  Heck... why be greedy.  I'd quit for a measly 10 Million.  How 'bout you ?

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) over 11 years ago

@ Tim:  Please... all this nonsense about Socialism is getting very, very boring.  Perhaps some other night time viewing other than Sean Hannity might be a good idea.

@ William:  I must say.  After 31 years of service... being compensated according to a contractual obligation signed years ago... it sounds like he deserves it.  After all... if we cannot depend on a contract continuing to be a contract... it's gonna get really crazy out there.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) over 11 years ago

William - If GM is basically bust and without the taxpayer's bailout, how would Wagoner be able to get his money? Who exactly would he sue on his "contractual obligation"?

You seem to ignore the fact that it was on his watch that GM suffered enormous losses! Is he in no way accountable?

As for your ideas about building cars that people wanted .... you didn't explain why GM literally crushed the EV1 cars that were returned after their leases expired ... when in fact, the drivers asked to buy the cars outright. They wanted to buy the EV1's but GM said no!!

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 11 years ago

Last time, they used timely-received bailout money to pay bonuses and the country was in an uproar.  Are they really going to do it again?

Kathy

Posted by Kathy Toth, Ann Arbor Real Estate Experts - Kathy Toth Team (Ann Arbor Market Center Keller Williams) over 11 years ago

See "The Auto Industry Bailout - Management needs a huge incentive to perform"

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 11 years ago

Maybe real estate agents should do short sale, REO, and foreclosure properties for zip, nada, nothing at all.  Think that is a good idea?  Keep on talking like you do about not paying people for work they have done, makes no difference if it was a good or bad result, and it will come back to bite you.

Posted by Ross Westerman over 11 years ago

Ross - Whose money is being used to pay this ex-CEO for failure?

It's taxpayer money, not GM's.

You reference to commission earned from Short Sales, REO's and Foreclosures in no way compares to the retirement package in question!

Have you researched to see what has already been paid as salary and bonuses during the years the company was losing billions?

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 11 years ago

Stewart,

I have a real problem with the "gommit" getting involved in any way shape or fashion.  If you or I or anyone else who is bitching about this were on the BOD or owned 5-10% of company then maybe we/they could have a voice in this matter.  It may be taxpayer money (in our eyes but not the "gommits eyes") and you or I still have no say in the matter.

Like I said "good result/bad result" it is still Mr. Wagoner's money.  As far as commission is concerned if the "gommitt" wants you to sell these properties for nothing then you will do it and like it.

Posted by Ross Westerman over 11 years ago

Rick Wagoner has been with GM for over 30 years and i am sure he has earned his retirement package. As far as him resigning it was more like him being ousted. And if you saw the market today they didnt like it either i think it ended down close to 300 points...! What Wagoner did wrong was take the bail out money. He should have thrown GM to BK and restructed the Auto Union contracts which are killing this countries auto industry. We now have a President (who has no executive experience) deciding who will run multi billion dollar companies while his own stooges cant even staff the Treasury. There are 17 open positions at the Treasure that they have not filled. So basically we put Tim Geitner and his staffers in charge of one trillion dollars and your pissed about 20 million to a guy who worked his entire life from the bottom up at a company? Seriously?

Have you researched what the Auto Union President gets in salary? All the while wrecking the entire industry with cafe standards and what not.

Posted by Jay-Paul Lowry over 11 years ago

Stewart it must be the union's fault!  All that cafe standards and what not stuff.  I just read that the FIX noise bunch is calling for the head of the UAW to be fired because he is most responsible for the demise of the auto makers.  Are we tired of this crap yet?  I also read that GM is in a pickle regarding the Hummer, seems they think they should stop producing it but they have a new market, Iraq!  Seems some rich Iraqis have taken a shine to red and yellow Hummers.  What to do, what to do?  Bottomline is the auto makers literally told us what we wanted, rather than us demanding the gas guzzlers they produced.  Lets see, big SUV's used lots of expensive gas, smaller vehicles use less expensive gas.  No brainer except the public was brain washed.  As for the EV1? concerted effort to derail alternative fueled vehicles.  I for one don't care how long someone worked for a company or what their contractural agreements are, if you run the company into the ground, to the point there is no money, then there is no bonus.  In this case, there is no GM money left, what they have belongs to us.  Case closed.

Posted by Terry Haugen STAGE it RIGHT! 321-956-2495 (Stage it Right!) over 11 years ago

Stewart, if you're a sales rep, at any level, for any large corporation you will be fired for not much more than a couple of months of not achieving a company mandated budget/quota.  It's a disgrace that someone like Wagoner or any other CEO making millions per year is allowed to under perform for an almost indefinite period.

If the people making under $250k had been treated like those driving $250k cars (and vice versa), our country would be much more stable.

Posted by Jay Allen, MovieVoice (MovieVoice Production Co.) over 11 years ago

Jay (Preferred Financial Funding) - You are correct on the fact that the stock market was down over 250 points yesterday (3/30/09) ... but you lose sight of the more important fact that Wall Street had its very best month in 6 years in March 2009 .... less than 100 days since Obama's been President.

Perhaps if you looked at the entire picture, in proper context, you would see what's really going on.

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 11 years ago

The entire picture...well lets see...when Obama was elected what was the stock market at? And now? Well if thats not Obama friendly how about...unemployment what was that at when he started? and now? Since Obama has been elected $24 Trillion yes TRILLION of the WORLDS net worth has evaporated. That was released by BlackRock. Also i believe there have been more single day losses that set or nearly set one day records under Obama than anybody else. And you can say he didnt create this mess he inherited it...but what is he doing to stop it or even better what was his role in creating it?...

Also about the EV1....those cars dont sell in the US. At all. GM has 20 lines of automoblies and 11 are profitable...guess what they are all truck/light truck and SUV. Those cars sell. Also the SUV was created by the automakers to avoid C.A.F.E standards thats why it had a 5th seat so it could be exempt. But America was brainwashed into buying them...thats so funny! really brainwashed?

Also the big picture, GM is private industry and now "Elected" officials are terminating private executives. Where does it stop...and most people are saying bank CEO's will be next. Thats the big picture..FREEDOM. He goes on tv and blast investment bankers and lawyers saying we shouldnt want our kids going to school to become them...who is he to tell another American what your kid should want to be. What if he said our kids shouldnt want to be realtors how would you take that?

Posted by Jay-Paul Lowry over 11 years ago

Jay - Are you seriously trying to blame President Obama for the past eight years during which time the greatest amount of national debt was incurred?

What happened to the surplus that existed when Bill Clinton left office?

How do you know that the EV1 didn't have a market in the USA? Did GM really try to market and promote the vehicle? And why did GM need to physically destroy those cars after the leases expired? (Incidently, do you know how popular the Toyota Prius is?)

And finally, if GM is truly "private industry", why are they using billions of taxpayer money?

Any truly private enterprise would have declared bankruptcy by now!

You support for Wagoner seems to indicate that you don't believe in holding anyone accountable for their actions.

Posted by COMPASS PALM SPRINGS | Stewart Penn, COMPASS Palm Springs - Broker Associate (COMPASS) over 11 years ago

Obama has out spent every president combined since George Washington! That is not a joke its factual. How are you going to hang the national debt on Bush when Obama will add over $5 Trillion in 6 years. And the surplus Clinton had when he left office was the result of the Regan tax cuts which lowered the highest bracket from 70% to 24-28%. Then Bush raised them to the 30's% and Clinton raised them again then Bush Jr. Cut taxes. Oh yah and your buddy Obama is going to effectively raise them again by letting the tax cuts expire when he could extend them.

Also a majority of the debt recently incurred by the Bush administration was after 2005. Do you remember what happened at that time? There was a change in power in the Senate and The House. The President doesnt pass spending bills, Congress does! Guess what Obama was in Congress during the massive spending you questioned. Perhaps a refresher is needed on the serperation fo powers of our government and the checks and balances.

GM should have never been given tax payer money...but where did the need for averting this crisis come from?....Yah it was Barney Frank, Chriss Dodd, Pelosi and you guessed it Obama in CONGRESS. In fact pror before Obama was President he went to the White House met with Bush and told Bush hed needs to bailout the Autos. 

I dont support GM, AIG, CITI or anybody getting tax payer money it should have never been paid at all. So my question is who spent more money Bush in 8 years or Obama in 100 days?

So let me guess your going to say well we already a huge debt whats the difference? Heres the problem with keynesian ecomomics. It says if the economy is slow the government can spend its way out if it. Really? If you couldnt pay your bills would go out and get more debt? Would you go to the mall and buy a 60in flat screen tv? NO, but thats the theory just spend your way out of it.

As far as the Evo Market not being there. You could use Toyota as a test case. The Prius is not their best selling car! Suprise. http://blogs.cars.com/kickingtires/2008/07/toyota-corolla.html that link will show you the top 10 selling cars in the country for june of 08 so here they are let me know if the Prius is on there:

Below is the new top 10.

June

1. Toyota Corolla: 42,180 (includes Matrix)
2. Toyota Camry: 41,572
3. Honda Civic: 39,967
4. Honda Accord: 39,704
5. Ford F-Series: 38,789
6. Chevrolet Silverado: 34,290
7. Nissan Altima:
24,541
8. Chevrolet Cobalt: 20,888
9. Ford Focus: 17,950
10. Hyundai Sonata: 16,875

Also i noticed you completly avoided the assault on freedom of Americans by our current 'regime' and skipped right around that. It is every Americans right to drive what ever car they want, earn as much money as they want or can, or to leave their light on in their house when they are not home (oh yah in the stimulus bill, Obama included a section that would require all american citizens to put a goverrnment meter in their home to be monitered by a government electrician and the government will determine how much electricity you can use).

I would ask you to remember what made this country what it is, and why we revolted against the English. You will say we are not there yet, but why even head down that road. God Bless America!

Posted by Jay-Paul Lowry over 11 years ago

Got a message from one of my right-wing friends about this today... it must have been the talking point of the day for them: "Since when does the gov't have the right to fire a private company's employee..... blah, blah, blah" I'd still glad we won the election, but it will be hard to listen to this nonsense snipping for the next 8 years.

Posted by Ann Heitland, Retired from Flagstaff Real Estate Sales (Retired from RE/MAX Peak Properties) over 11 years ago

Totally agree that a "retirement" package of this magnitude is uncalled for.  I totally agree that waste and fraud is rampant all over this country.  The "retirement" packages are not unlike the golden parachutes of our politicians in that they were generally equally as unearned. 

I find the scarriest line in the whole dang post to be this: "Rick Wagoner resigns as the CEO of GM under pressure from the Obama administration."   These are indeed scarry times in our nation.

Posted by Ron Tarvin, Broker, Katy, Houston, Cypress 77450,77494,77095 (Residential, Investment properties, rehab projects, property management, luxury homes, new construction!) over 11 years ago

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