| wmhjr |
03-22-2011 06:15 PM |
Two things - not to rain on any parades, but....
Ford got lucky. Nothing more than that. They were simply lucky. Ford did not see this stuff coming. Mulally left Boeing, and immediately upon arriving at Ford borrowed $23.5 BILLION, secured by Ford assets and even Ford branding (such as the Blue Oval insignia). He also slashed the hourly workforce by 50% and cut salaried expense by 40%. So I guess I should amend my statement to the fact that Ford chose the right guy, and did make some smart decisions - though they were risky. Almost ALL of Ford assets are on the hook to secure the $23.5B they borrowed, so if they had defaulted, they'd have lost everything. Bottom line however is that they did exactly what GM and Chrysler wanted to do later (borrow money) but after the crash, NOBODY could borrow money. Ford got there just in time.
The second thing. CEO Bonuses. Yup, they seem outlandish. We can all argue about whether or not they're a good thing or a terrible thing. But....
They have not a darned thing to do with either the price of the product or the viability of the company. CEO compensation including all bonuses, stocks, frankly EVERYTHING (which btw is public knowledge anybody can review) makes up less than 1/10 of 1% of corporate expense. So, do the math. They are meaningless when compared to the labor force costs, costs of material, etc. If the CEO worked for a single penny per year, it would not affect the balance sheet in any possible way. That's why it's a ridiculous conversation. Again, not saying it's right - or wrong. It's just meaningless.
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