How to Reinvent GM on $1 a Year

Detroit – (BP) In a recent pitch to Congress, top executives at GM, Ford and Chrysler said they were willing to take only $1 in salary in 2009 if they ended up tapping into a much hoped-for infusion of federal monies. That idea, along with other job and cost cutting aimed at reinventing the “Big 3″, should convince lawmakers to kick in some $40 billion overall to the beleaguered auto industry.

While taking a salary of only $1 a year sounds like a huge sacrifice on the part of auto executives, none of them will be hurting too much. A brief survey of recent compensation for auto executives reveals:

• GM CEO Rick Wagoner earned $9.3 million in salary and bonus in 2006, nearly double what he earned in 2005;. His salary for 2008 is expected to be $2.2 million;
• Chrysler’s new CEO, Bob Nardelli, became a symbol of corporate excess when he left Home Depot early this year with a $210 million severance package. Nardelli earned $1.68 million from Chrysler in 2007, a year in which the company reported a loss of $38.7 billion;
• Ford’s new CEO, Alan Mulally, got $27.8 million in salary and bonus in his first few months on the job, including an $18.5 million signing bonus. He has earned nearly $50 million since taking charge of Ford;
• In contrast, Toyota’s top executive, Hiroshi Okuda, earned $903,000 in 2006.

If the Big 3 can get government funding and pull off a massive turn-around for the U.S. auto industry, they will be perceived as the cleverest men in all the land. The real tragedy, of course, would be allowing these three executives to remain in any position of authority after collectively bringing the entire American auto industry to the brink of collapse.

General Motors Corp. President and Chief Operating Officer Fritz Henderson said Wednesday that bankruptcy isn’t a viable option because it would further erode consumer confidence in the automaker: “…we do not want to give consumers a reason not to buy our cars and trucks.” Henderson later added that he hoped his remarks would be taken out of context, because the context in which GM now finds itself has already completely eroded consumer confidence.

This $3 combined salary for the Big 3 executives might be the most important $3 the federal government has ever contemplated spending.