Auto Bail Out?

[strategy 4]

or Japan or Korea

OR ASIA

[strategy 4]

he did pretty good until the last bit.

[Pot Odds RAC 23]

This sounds nice and will be true in the long run, but it ignores the very bad and immediate consequences that would come out of GM, Chrysler, and Ford failing more or less all at once. The auto industry is big. It's really big. GM going under would cause the entire city of Detroit to completely fail. It would become a wasteland. It would cripple all of Michigan. Hundreds of small towns all over the country who rely on the employment of factories would be more or less wiped off the map. And 3 million people don't simply "move to more productive jobs" overnight. It's going to take a long, long time to absorb this hit. And by the end of it, we could fall deeper and deeper into debt to China and others. We'd probably lose our status as the last remaining superpower because of the economic downturn it would cause.I understand the libertarian argument that markets take care of themselves. This is true. The problem, of course, is that we live in a global economy. If the markets "take care of themselves," the resulting equilibrium could result in the US falling way down with respect to the rest of the world.Look, I'm for a bailout of the auto industry if smart people who know the industry can agree that a bailout would actually help the companies in the long run. If it can be demonstrated that these companies only need a little boost to get back up on their feet, then I'm willing to give them that boost. If we're only putting band-aids on a gunshot wound and their death is more or less inevitable, then I'm much less enthusiastic.I understand that forest fires are good for the forest. But that doesn't mean that we let an uncontrolled fire threatening to raze the rain forests go unchecked.

This.The Libertarian in me despises the notion of an Auto Bailout. I've worked with each of the Big Three and others and can tell you their problems are largely self-imposed.However, this is a matter of Theory meeting Reality. Any argument so far that I have seen AGAINST the bailout is one of "morality" or "accountability". None of them is based in economic reality and cost benefit analysis. The economic reality of one or more of the Big Three entering Bankruptcy in the next 100 or so days would be incalculable. The negative impact will be far more than $25 Billion.Look. I live in Detroit. Make all the jokes you want, but the bottom line is if GM goes Bankrupt, Detroit goes Bankrupt - and likely brings the entire State of Michigan into Bankruptcy. This WILL affect the entire global economy including your State. Beginning with Ontario - Canada will be devastated. Mexico too. You think that the Feds had a problem when a lousy hurricane hit the Gulf States? Remember the National effects of a Top 50 City being destroyed by a hurricane? What do you think the effects will be of a Top 10 or 11 (by population, higher if you include "Metro Detroit") City going under and then taking the entire State with it? Wait until the bills start piling up to save an entire State. I'm not certain where Michigan ranks today in terms of dollars paid vs. dollars received in Federal Aid, but we are certain to be "needing" our "fair share" of disaster money. To state that the poorly managed companies should be held accountable is simplistic. If GM enters Chapter 11 - there is no restructuring for them. They're done. No one buys a five figured item from a company in Bankruptcy. Then the rest of the dominoes start to fall. If GM goes bankrupt it will be nearly overnight. They have barely enough cash to make it thru the year. People are saying that Suppliers will just shift to support the companies that move in to take the space vacated by GM. Nonsense. The cycle for most suppliers is set for years. They have NO ABILITY to just switch their production to some mythical new auto company. Suppliers will be out of business the same WEEK that GM announces they cannot make Accounts Payable. Payroll at everyone of those suppliers relies on payment within contractual terms.If Detroit goes down there will continue to be the cheap shot jokes - but the real effects on the global economy will be no laughing matter.

[copernicus 0]

This.The Libertarian in me despises the notion of an Auto Bailout. I've worked with each of the Big Three and others and can tell you their problems are largely self-imposed.However, this is a matter of Theory meeting Reality. Any argument so far that I have seen AGAINST the bailout is one of "morality" or "accountability". None of them is based in economic reality and cost benefit analysis. The economic reality of one or more of the Big Three entering Bankruptcy in the next 100 or so days would be incalculable. The negative impact will be far more than $25 Billion.Look. I live in Detroit. Make all the jokes you want, but the bottom line is if GM goes Bankrupt, Detroit goes Bankrupt - and likely brings the entire State of Michigan into Bankruptcy. This WILL affect the entire global economy including your State. Beginning with Ontario - Canada will be devastated. Mexico too. You think that the Feds had a problem when a lousy hurricane hit the Gulf States? Remember the National effects of a Top 50 City being destroyed by a hurricane? What do you think the effects will be of a Top 10 or 11 (by population, higher if you include "Metro Detroit") City going under and then taking the entire State with it? Wait until the bills start piling up to save an entire State. I'm not certain where Michigan ranks today in terms of dollars paid vs. dollars received in Federal Aid, but we are certain to be "needing" our "fair share" of disaster money. To state that the poorly managed companies should be held accountable is simplistic. If GM enters Chapter 11 - there is no restructuring for them. They're done. No one buys a five figured item from a company in Bankruptcy. Then the rest of the dominoes start to fall. If GM goes bankrupt it will be nearly overnight. They have barely enough cash to make it thru the year. People are saying that Suppliers will just shift to support the companies that move in to take the space vacated by GM. Nonsense. The cycle for most suppliers is set for years. They have NO ABILITY to just switch their production to some mythical new auto company. Suppliers will be out of business the same WEEK that GM announces they cannot make Accounts Payable. Payroll at everyone of those suppliers relies on payment within contractual terms.If Detroit goes down there will continue to be the cheap shot jokes - but the real effects on the global economy will be no laughing matter.

My jury is still out. ^^^ has been my general feeling, but how to get the unions on board so that any bailout is successful in the long term is a concern.

[Pot Odds RAC 23]

Production Time per VehicleSource: 2005 Harbour ReportGM:34.3 hours, 2.5% improvement since 2003Toyota:27.9 hours, 5.5% improvement since 2003

I know I'm Cherry Picking, but 6.4 hours and closing isn't that bad. What is that like 2% of the cost of a $20K vehicle?And those States where Auto Production is cheaper than in Michigan aren't working under the burden of Union Laws enacted in States like Michigan 70 or 80 years ago. GM doesn't use Unionized Labor here because they want to.

[Pot Odds RAC 23]

My jury is still out. ^^^ has been my general feeling, but how to get the unions on board so that any bailout is successful in the long term is a concern.

This is an issue. Lately the Unions have realized that they need to save jobs or they are out of business too. Here in Michigan no one (Unions included) is doubting that GM could fail and take all of us with them. We are all going to have to give a TON in this State and we know it. I've already lost a huge share of my net worth, not just in the stock market, but in my home value. That is going to get worse before it gets better. I am assuming I will have to be paying higher taxes. We have been in a Single State (non-Gulf State) Recession for a few years now. But I can accept all that if there is some hope for an eventual (within 5 years) recovery. We in Michigan and especially the Detroit area - know we are going to have to have a VERY bitter pill to swallow. The problem is the rest of the country may also be forced to take some medication too.

[Balloon guy 158]

I think tariffs instead of direct bailout just switches the problem from a direct and visible tax to an indirect and nearly invisible one.Forcing people to buy overpriced crappy cars when cheaper ones are available is just as bad for the economy as just taking that same money and sending it directly to the crappy car manufacturer. Maybe worse, because the tariff not only rewards the inefficient producer, it punishes the good one.

I think you are right and I was wrong.I didn't really want to do this to help the big three as much as not let foreigners get all the benefits of our country's market while American's suffer because unions screwed themselves while designers ignored the obvious need to get some bells and whistles on their cars.I'm of the opinion that we could force Toyota etc to build more plants in America, maybe buy the ones in Detroit and keep the jobs here, which is better than just buying them from Canada.

[Nimue1995 1]

Okay H, this is why I'm still on the fence about the auto bailout. But from what I understand, they're now talking about using the $25 billion appropriated for the environmental refit and diverting it to the big 3 as a loan. And that I could live with. What I can't live with is propping of a company that's in it's death throes and will go down anyway. I do have a question though. If it's GM that's in trouble, then why is Ford and Chrysler in on this? My understanding was that those 2 were not in that bad a shape. This whole thing just has a bad feel to it. If we bail out GM then aren't we rewarding incompetence and what's to say that they can come up with a plan that will make a difference? And if we don't bail them out, then we face the fact that this country could well go under. We're sitting on a mountain of debt and all it would take would be the loss of faith in the U.S. government to weather this crisis. That said, this is much easier for me to get my head around than the Wall Street thing. It seems like to me that the Wall Street bailout went to go help those who got us into this mess and not very damn much of it has trickled down to Main Street.But with the automakers, that IS main street for a great many towns and not just in Michigan. In some small towns, the auto dealer IS the major tax base. We've played with economic fire on so many fronts in this country for years and haven't paid attention to the lessons of the past fires. Instead we keep thinking that "oh well, it didn't burn us last time so it won't this time". So we've ignored the smoke alarms and let the fire smolder until now we may well all burn.

[85suited 0]

$25 billion appropriated for the environmental refit

Why are we spending 25 Billion to have the big three be innovative? This cost should be in their business model....We are suckers....If you stop producing things people dont want or need, you go out of business.....

[Nimue1995 1]

Why are we spending 25 Billion to have the big three be innovative? This cost should be in their business model....We are suckers....If you stop producing things people dont want or need, you go out of business.....

A kneejerk reaction that I admit to having also initially. But after reading H's post about what the true effect of any one of the Big 3 going out of business, I've revised my attitude about it. And the $25 billion has already been appropriated so it's not like we have a say about it. Only difference is going to be that the automakers will be able to borrow against it to keep operations going for now. In normal circumstances, I'd say you were right. But with the country in recession, this would probably send it into depression. Do you really want to see 25% unemployment in this country? Do you think we'd even survive as a country should that happen? I have very grave doubts that we would.

[slink 1]

No bailout. Gm doesn't need 7 divisions. And who need a freeeckin' Cadillac truck for goodness sake. You don't see Lexus puttin' out a truck. They've dug the hole, let them sleep in it.Get rid of all the extraneous divisions. Keep chevy and Gm. Hire all the illegal aliens coming over the border from canada, pay them under the table. Save Brazillions.CEO's flying to D.C. in private jets, no real plan....good P.R.

[85suited 0]

A kneejerk reaction that I admit to having also initially. But after reading H's post about what the true effect of any one of the Big 3 going out of business, I've revised my attitude about it. And the $25 billion has already been appropriated so it's not like we have a say about it. Only difference is going to be that the automakers will be able to borrow against it to keep operations going for now. In normal circumstances, I'd say you were right. But with the country in recession, this would probably send it into depression. Do you really want to see 25% unemployment in this country? Do you think we'd even survive as a country should that happen? I have very grave doubts that we would.

I love the recession we are in... sounds like people are waiting in line for bread and soup...Hundreds of people lined up outside some Verizon Wireless stores to buy the new BlackBerry Storm on Friday, but many walked away empty handed.The Storm, which has been hyped for months, went on sale Friday morning. The device is the first BlackBerry phone to have a touch screen, making it a strong competitor to the Apple iPhone on AT&T's network. Since Verizon Wireless announced it would be the exclusive U.S. carrier for the Storm, the wireless operator has been expecting it to be a hit. In fact, it's the only new phone the company is introducing before the busy holiday season. Last year, Verizon launched four new phones before the holidays.Reuters reported earlier Friday that more than 200 people lined up outside a Verizon Wireless store in midtown Manhattan, and the store was sold out of the new phone within an hour of opening at 8 a.m. Other stores in Washington, D.C. and New Jersey also had lines of 100 people or more, Reuters said.

[LongLiveYorke 38]

I love the recession we are in... sounds like people are waiting in line for bread and soup...Hundreds of people lined up outside some Verizon Wireless stores to buy the new BlackBerry Storm on Friday, but many walked away empty handed.The Storm, which has been hyped for months, went on sale Friday morning. The device is the first BlackBerry phone to have a touch screen, making it a strong competitor to the Apple iPhone on AT&T's network. Since Verizon Wireless announced it would be the exclusive U.S. carrier for the Storm, the wireless operator has been expecting it to be a hit. In fact, it's the only new phone the company is introducing before the busy holiday season. Last year, Verizon launched four new phones before the holidays.Reuters reported earlier Friday that more than 200 people lined up outside a Verizon Wireless store in midtown Manhattan, and the store was sold out of the new phone within an hour of opening at 8 a.m. Other stores in Washington, D.C. and New Jersey also had lines of 100 people or more, Reuters said.

[FCP Bob 1,312]

Interesting Opinion piece from a Canadian perspective.Auto manufacturing is a higher percentage of Canadian GDP than it is in the US and there's no doubt that our government will be throwing money at the Big 3 along with the US.http://www.thestar.com/article/539375

Ten key issues for Canada before auto industry bailout Potential cost of aid needs to be weighed against social cost of industry collapseNov 19, 2008 04:30 AM Dennis DesRosiers On CNN's magic map on election night, Michigan, Ohio, Indiana and Pennsylvania were all blue and crucial to Barack Obama's win. So it should surprise no one that he is willing to bail out Detroit once he is installed as president.If this happens, then Canada almost certainly needs to be at the table since any U.S. assistance will have strings attached, such as moving jobs to the U.S. As our governments head down this path in Canada, there are 10 issues that need to be considered.First, it needs to be understood that the problems the Detroit three face today are for the most part cyclical and not structural/strategic. The simple fact of the matter is that the American consumer had been buying vehicles at a 17.5 million annual rate and this has dropped to 10.5 million. This is the steepest decline on record and most of it is due to the financial crisis. Consumers can't get credit. And when you take 7 million units out of the market even strong companies are in trouble.Second, it is an absolute certainty that consumers in North America will buy record numbers of vehicles this coming decade. The driving age population continues to grow, there is no sign of lower ownership and vehicles are entrenched in our lifestyles. This cyclical downturn is exactly that – cyclical. Consumers are going to come roaring back to the market and when they do there will be multi-billion-dollar profits made by the automotive sector.Third, the Detroit three's problems are not because they are lousy companies, produce shoddy product or the wrong product for the market, have dumb executives or a failed business model. That may have been the case many years ago but these companies have been aggressively addressing these issues for quite a long time with some success. The seriousness of this cyclical downturn cut this restructuring off at its knees. Yes, they continue to lose market share but this is more because there are now eight very capable vehicle company groups in North America instead of three. No matter how good a company you are, if you have eight near equal competitors in the market instead of three, then the original three lose a lot of market share. That is simple math. The Detroit three have made a lot of mistakes but these mistakes simply got them to a lower market faster. They were destined to lose much of their market even if they had made no mistakes.Fourth, any assistance to the Detroit three will not solve their remaining problems. Financial assistance only gives them more time to solve their problems.Fifth, political solutions almost always lead to bad economics. Adam Smith's invisible hand is the best way to solve this crisis but it is very severe in its solutions and no politician wants to face the possible chaos a market-driven solution would cause. More than 7 million workers in North America are directly tied to making parts and vehicles or distributing, selling or fixing vehicles. Putting the Detroit three through a formal legal restructuring would be very disruptive for many of these workers at a time when the natural defences in our economy are weak.Sixth, we need a higher comfort level with the strategies being implemented by the Detroit three – that they are working and will continue after assistance has been provided. For two decades we were told by the Detroit three: Just wait until our strategies play out, everything will be fine. We waited and things are not fine. Will this time be any different? It appears to be the case but we had better keep their noses to the grind stone.Seventh, and closely related to the previous point, someone has to convince labour that it has to get real on costs. Our union leaders seem to have missed a couple of decades; we no longer have an industry in which Detroit sells about 80 to 90 per cent of all vehicles, allowing unions to hold them for ransom with "pattern" bargaining. This year, the Detroit three's total market share has dropped to close to 50 per cent. Consumers have real choice; they do not have to pay the high cost of labour embedded in Detroit-built vehicles.Eighth, don't forget the taxpayer. Imagine backbenchers from non-automotive ridings. A good portion of their constituents have no interest in buying a Detroit-built vehicle: many have had a bad experience with one of them; no ridings outside southern Ontario have any vehicle or parts manufacturing jobs and never will; many view workers pensioned off as "fat cats" who milked Detroit for excessive wages before taking a cushy pension and believe current workers are overpaid as well. Does anyone really think that these taxpayers want our government to bail out the Detroit three?Ninth, don't forget the car dealer. There are 3,100 car dealers across Canada. They reside in absolutely every community, large and small. They employ more than 155,000 Canadians. Last year alone they contributed more than $100 mill-ion to their local charities. Try to find a hockey or soccer league that does not have a car dealer sponsoring a team. And car dealers are hurting and as threatened as the Detroit three and vulnerable to failure.Tenth, don't forget the social impact on society of an implosion at the Detroit three. It is easy for many to sit back and say: Let them fail. But tens of thousands in Canada would lose their jobs. In high unemployment situations, crime goes up, families come apart, medical problems develop and untold other human problems come to the surface. Dealing with all this is expensive for government. So the crisis in the auto sector is going to cost taxpayers a lot either directly or indirectly.Dennis DesRosiers is president of DesRosiers Automotive Consultants.

[strategy's_touch 0]

I love the recession we are in... sounds like people are waiting in line for bread and soup...Hundreds of people lined up outside some Verizon Wireless stores to buy the new BlackBerry Storm on Friday, but many walked away empty handed.The Storm, which has been hyped for months, went on sale Friday morning. The device is the first BlackBerry phone to have a touch screen, making it a strong competitor to the Apple iPhone on AT&T's network. Since Verizon Wireless announced it would be the exclusive U.S. carrier for the Storm, the wireless operator has been expecting it to be a hit. In fact, it's the only new phone the company is introducing before the busy holiday season. Last year, Verizon launched four new phones before the holidays.Reuters reported earlier Friday that more than 200 people lined up outside a Verizon Wireless store in midtown Manhattan, and the store was sold out of the new phone within an hour of opening at 8 a.m. Other stores in Washington, D.C. and New Jersey also had lines of 100 people or more, Reuters said.

you seem to have a solid grasp on how the economy works. cheers.

[85suited 0]

you seem to have a solid grasp on how the economy works. cheers.

I am not saying we are not in recession... just pointing out the crazyness that exists..... ecomonic times are rough yet... hundreds of people camping out to spend redicluous amounts of money on a new blackberryWent to open table on thursday night to try and get a last minute reservation at a nice chicago restaraunt for friday night between 6-8:30... nothing to be hadMaybe this is a contributing factor to why we are in trouble.... Ya think?Consumers owe $971 billion, which is $3,184 of credit card debt per person, or $8,299 per household. (Source: Federal Reserve, G.19 Release, November 7, 2008)

[strategy's_touch 0]

I don't really know what's going on either, I just misinterpreted your post.

[Paul Brevard 0]

It's not Constitutional! People use the term "General Welfare" in the Constitution to get away with all kinds of crap. That $700b really ended all our troubles didn't it?My industry is in deep trouble. We have millions of people that stand to lose their jobs and I haven't heard anyone here talking about a crazy bailout.The term Bailout really means "Not having to take responsibility for your actions."Delta came out of it without a bailout and so should the banks, auto and whatever else comes up. Congress has become nothing more than any other CEO. It's one big business. Besides, I may be wrong, but if they are able to restructure they might be able to kick out the damn union.It says a lot when you hear the guy ask the men if they were willing to sell their planes and go back on commercial air and no one answered. They didn't come there with any plans, they just showed up with their hands out like some of the States are and everyone else did when they found out they were printing up more money. Did anyone see how much GM sold it's Suzuki stock for? Correct me if I'm wrong but I think $2b. How much more do they have invested that they can sell? I understand they have around $19b put back. They have more plants and are building more cars than they can sell! Why don't we all just form Pokerplayers Inc. and ask for a bailout on our losses!

[Pot Odds RAC 23]

It's not Constitutional!

Sorry, but time and again the Strict Libertarian interpretation of the Constitution has been proven to be not accepted. Just because radical Libertarians continue to shout "Not in the Constitution therefore not Constitutional" doesn't make it so.

[weishan14 0]

Will the last person leaving Michigan please turn out the lights?

That would be me - accept, since I won't be leaving, I think I'll leave them on - cuz I'm scared of the dark!... and no, I'm not in favor of a bail-out. I think they need to learn to use the resources that are available in a constructive way, and work their way back up. That's what the rest of us have to do. Until people (and/or companies) learn to take responsibilty for the decisions they make, things will never get better. Hand -outs don't help in the long run.

[Balloon guy 158]

That would be me - accept, since I won't be leaving, I think I'll leave them on - cuz I'm scared of the dark!... and no, I'm not in favor of a bail-out. I think they need to learn to use the resources that are available in a constructive way, and work their way back up. That's what the rest of us have to do. Until people (and/or companies) learn to take responsibilty for the decisions they make, things will never get better. Hand -outs don't help in the long run.

The democrat party's collective head just asploded

[copernicus 0]

That would be me - accept, since I won't be leaving, I think I'll leave them on - cuz I'm scared of the dark!... and no, I'm not in favor of a bail-out. I think they need to learn to use the resources that are available in a constructive way, and work their way back up. That's what the rest of us have to do. Until people (and/or companies) learn to take responsibilty for the decisions they make, things will never get better. Hand -outs don't help in the long run.

Make the big 3 execs live in Port Huron in existing housing until they show a profit for 3 consecutive years. Amazing how fast things will turn around!

[Paul Brevard 0]

Sorry, but time and again the Strict Libertarian interpretation of the Constitution has been proven to be not accepted. Just because radical Libertarians continue to shout "Not in the Constitution therefore not Constitutional" doesn't make it so.

Sorry but this is a conservative stance. The congress was not given power to use tax payers money to bailout corporations. There is no place for the federal government to take it upon themselves to bailout corporations that are full of lobbyist that continue to fleece the American people. Bankruptcy was created so that the corporation can restructure and set into place new ideas and get rid of the problems that created this situation in the first place. The federal government, once again, is putting itself in the position of slinging out paper at a problem where adding more money into a failing corporation is only a temporary fix. They need to fix the problem and not add to it.It's like the pro player that decided to build nice apartments for the people in his old neighborhood. He came back a few months later and they were just like the old places they lived in before. He found clothes in the microwaves, graffiti all over th buildings, and people begging for grocery money because they had spent it all on ciggarettes and such.He realized then that you can't buy people out of a bad situation. They have to learn a lesson and be educated on what they should do with their money. That's what needed to be done with the banks and the auto world. The big three have been crying for a long time that they were hurting and now they use this problem to blame everything else on.We should conserve our federal funds and lower our taxes. We need to allow the state the authority to do what the need to do. If Michigan wants to bailout GM or any other state where GM plants are located, wants to bail them out then so be it. Those States have benefitted from the jobs those companies brought and now should have to pay their part when they are in trouble. Example: Shreveport got the GM plant. Other states wanted that plant but didn't get it. Why should those states that did not gain those jobs and had to do other things to keep workers and tax payers in their state have to give Louisiana a boost for something they wanted?Let this problem be handled by the States and not the Feds.

[Nimue1995 1]

Just read an interesting article regarding executive pay at GM compared to Toyota. Seems that everybody at GM is feeling the pain except Rick Waggoner. http://www.beggarscanbechoosers.com/labels/CEO%20pay.html

Despite GM's Staggering Losses, CEO Still Rakes In MillionsBy MARC McDONALDIt's difficult to imagine a more poorly run corporation than General Motors these days. The company reported a $2.5 billion loss in the third quarter and warned that it could run out of cash in 2009. GM's share price is down 78 percent this year. A lot of people at GM are feeling a lot of pain these days. GM has been shedding jobs left and right and announced it will lay off 3,600 workers beginning early next year.One person who is not feeling the pain, though, is GM Chief Executive Rick Wagoner.This year, Wagoner will pull down a salary of $2.2 million, in addition to other CEO perks. And last year, Wagoner's total compensation was $14.4 million. That works out to $39,452.05 per day, including weekends. (Note that in 2007, GM lost a staggering $38.7 billion).And now, Wagoner has the gall to push for a government bailout for his company. In other words, Wagoner is a firm believer in the "capitalist" system when it comes to defending his obscene pay. But he apparently has no qualms about asking for billions of our tax dollars to help fix his sinking company.Perhaps the most troubling aspect of all this is that GM's woes are entirely self-inflicted and the result of poor management over the years. While Toyota was perfecting hybrid technology for its now wildly popular Prius, GM was betting the farm on clunky gas-guzzling SUVs. Now that the latter are out of favor, thanks to sky-high gas prices, GM is on the ropes, because it was too short-sighted and stupid to have a "Plan B."Actually, I guess GM does have a Plan B---stick out its hand and beg for the government to give it billions of our tax dollars.So in the end, all of us will wind up paying for this fiasco. GM's workers, who're being laid off by the thousands will suffer the brunt of the pain. We taxpayers will also likely suffer. In fact, just about everyone is going to suffer, in the end. That is, except for the people directly responsible for GM's mess: the over-paid GM executives like Wagoner whose short-sightedness and poor decisions led to the fiasco at GM in the first place.What's even more astonishing about this story is that Wagoner's fat paychecks dwarf the pay of Toyota's executives (who have traditionally earned only a small fraction of what their Detroit CEO counterparts earn).Although Japanese CEO pay is not publicly disclosed, it is estimated to be only a fraction of what U.S. automaker CEOs make. For example, the estimated pay of Toyota's CEO in 2005 was under $1 million.In fact, in recent years, U.S. CEOs have made vastly more than what their counterparts make in other nations. For example, in 2005, a typical Japanese executive made 11 times what a typical Japanese worker earned. In the U.S., the average CEO pulled down a staggering 475 times what the typical American worker earned.

[copernicus 0]

In fact, in recent years, U.S. CEOs have made vastly more than what their counterparts make in other nations. For example, in 2005, a typical Japanese executive made 11 times what a typical Japanese worker earned. In the U.S., the average CEO pulled down a staggering 475 times what the typical American worker earned.

that cannot be right. Ive consulted to Toyota/Lexus and their US Presidents are making salaries comparable to US company division heads, which is a helluva lot more than 11x what a Japanese or a US worker make. They arent making more than their Japanese bosses. There must be a very large element of compensation this author is missing.