Comments on: Ford CEO willing to violate minimum wage laws

By: Harold

Harold — Thu, 04 Dec 2008 15:41:36 +0000

Xlrq: well, dealerships have to stay in business for them to be able to execute warranty work, and any successful Chapter 11 bankruptcy would require trimming their numbers significantly (especially for GM, 7000+ to Ford’s 4000 and dropping … and plenty of dealerships are going to go bankrupt no matter what happens anyway).

An unsuccessful car maker bankruptcy could make it difficult to get (good, with the magic computer stuff needed nowadays) service in a lot of places. In the long run service for a price would be arranged most everywhere but there could be disruptions.

Why buy into that mess when you can buy good cars and trucks from healthier companies?

By: Xrlq

Xrlq — Thu, 04 Dec 2008 02:38:23 +0000

Huh? Of course the warranties are executed by the dealerships, but what does that have to do with anything? At issue is who is responsible for paying on the warranty, not who executes it. Besides, it’s not as though the dealerships are the ones about to go bankrupt, anyway.

By: Harold

Harold — Wed, 03 Dec 2008 22:00:30 +0000

Xrlq: to the extent that failures (especially detection of them) follow the bathtub curb, you really want your car company to be honoring warranties in the initial non-extended period. I don't know how extended warranty policies are structured by the (former) Big Three today, but wouldn't they still be executed by dealerships? Those would go into play in a Chapter 11 as well.

By: Xrlq

Xrlq — Wed, 03 Dec 2008 13:59:53 +0000

Harold, I’m not sure warranties (extended ones, anyway) are relevant to the manufacturer’s bankruptcy. Aren’t the extended warranties issued by separate entities?

By: Harold

Harold — Wed, 03 Dec 2008 13:47:54 +0000

Manish: NoManish: No, of the (former) Big Three the top dog for Ford is actually doing a good job, or at least about as good as likely possible with the structural problems he inherited (labor costs, state laws that forbid trimming dealer networks, etc. etc. etc.).

Mulally is an engineer (!!!) and Sloan School type from Boeing who apparently did a great job there but was passed over for promotion, and who started at Ford two years ago. He’s credited with helping Ford get into the best position of the three: e.g. unlike GM which has only one or two months of cash left (Chrysler is private so we don’t really know their situation but it’s said to be about as desperate), Ford can last till the end of next year.

Unlike the other two who have had 30 or so years to get their quality act together and have consistently failed, Ford appears to have managed the trick (finally, says this not entirely happy owner of an ‘89 Ford V6 Ranger (they REALLY messed up that engine in the next generation but mine had I believe the same seal problems)).

If I had a magic wand I’d Chapter 7 GM and Chrysler (no car company survives an extended Chapter 11 since warranty holders are creditors as well), do a prepackaged Chapter 11 for Ford and spend bailout money on keeping the supply chain alive for Ford and the transplants.

By: Roland the Headless Thompson Gunner

Roland the Headless Thompson Gunner — Wed, 03 Dec 2008 13:41:18 +0000

Exactly. Purely symbolic.

By: JKB

JKB — Wed, 03 Dec 2008 01:42:24 +0000

Ah, the Steve Jobs gambit. Not a bad idea. $1 salary with potential millions in stock options. A good gambit and in some ways shows a willingness to try to save the company.

By: Lyle

Lyle — Tue, 02 Dec 2008 23:29:53 +0000

Pure, meaningless political posturing. CEO pay, even if in the negative, eight-figure value range (CEOs paying hundreds of millions for the privilege of working there) wouldn’t begin to compensate for the company’s losses.

Now; what about union boss pay? How much should they get for forcing their members’ employers into the red and into a situation where they are incapable of competing in the marketplace without losing money?

And how about Congressional pay? How much should they get paid for scamming the taxpayers out of trillions of dollars? All of the worst CEO behavior in history, combined, wouldn’t come close to the harm that Congress is inflicting on us, nor do CEOs have the power of legal coercion over us.

By: tgirsch

tgirsch — Tue, 02 Dec 2008 21:00:31 +0000

I thought minimum wage laws only applied to hourly employees…

By: Manish

Manish — Tue, 02 Dec 2008 19:56:00 +0000

If it was based on pay-for-performance, he would be overpaid.

By: Tanya

Tanya — Tue, 02 Dec 2008 18:23:40 +0000

It only violates minimum wage laws if he does more than 9 minutes of work in the next year.