9/29/2023

CEO compensation and ‘billionaires’ have been a rallying cry for the UAW strike.

It’s hard to argue that billionaires fit nicely in a society where so many struggle.

Are carmaker CEOs worth their compensation packages of $20M – $30M per year?

It’s complicated … depends on the year.

2022 … the carmakers posted huge profits … CEO compensation during those years was definitely money well-earned.


What about 2023?

I say absolutely not as is evidenced by the fact that the UAW is striking several of their plants currently and thus far the strikes have cost the US economy $4B in revenue.


If you are CEO of a Detroit 3 carmaker, you can’t let the plants go on strike.

You have to get ahead of every possible negative outcome and figure out a way to prevent a strike.

No excuses.


Fain is completely obstinate but he has won the media battle.

His workers believe that they deserve more of everything even though the updated carmaker offers would put them in the 70th percentile.

They’re following him like lemmings, all the way to 17% interest credit card debt.


Future battery and electric vehicle plants, that could be non-union, are one of the sticking points in a deal with the UAW according to Ford CEO, Farley.

There is no commitment from the carmakers.

OK … I’m Jeff Fain … let’s burn it all down ….


Ironically, Ford and GM chose to invest billions recently here in the Detroit UAW hotbed.

The Ford Lightning electric truck started being built in Dearborn, MI in April 2022 and GMs Factory Zero EV Assembly Plant in Detroit and Hamtramck Opened in November 2022.

Why in the world would carmaker CEOs open these facilities and make incredible investments in these locations if they didn’t have a long-term labor agreement in place with the UAW?

The Detroit 3 CEOs, Barra, Farley, and Tavares are playing checkers.

Fain is playing imaginary checkers in a computer simulation, against the computer on level 1, where he wins every single piece and loses none.


Chess … ?

Magnus Carlsen isn’t too worried about a match against a Detroit 3 CEO.



The Detroit 3 CEOs never had to think like this before.

But nothing in the changing world to electrified vehicles is business as usual.

Can’t just follow the same blue print.

Their failure to anticipate these complications is erroneous.

Negligence.

Grounds for termination?


Had they properly navigated all of the moving parts, anticipated the moves, avoided a strike, and the $4B loss thus far for the economy …. would they have been worth every penny of their salary …. absolutely, and then some …

But they didn’t.

So they are not.


CEO compensation.

It’s a huge swing of worthiness or not … depends on the year … and the string of years put together.


When CEOs fail and also get paid … the vitriol comes out … justifiably so.

57-82, make it a great day, everyone!

SCN – Search Consulting Network