Security, Lack Thereof
Dec 30th, 2005 at 11:15 am by Susie
Tactics like this are despicable:
That’s when Delphi Chief Executive Robert S. “Steve” Miller, citing global competition and crippling “legacy costs,” ushered the $28.6 billion-a-year company into one of the largest industrial bankruptcies in U.S. history. In short order, Miller called for slashing workers’ compensation by almost two-thirds, threatened to void the company’s union contracts, and hinted broadly that he would follow the playbook he had used elsewhere of pushing responsibility for paying the firm’s pensions to the federal government and dumping its retiree health benefits altogether.
I noticed the CEO didn’t say anything about cutting executive compensation. Of course CEO salaries in the US are about 1000 times higher than those of the overseas competitors. I went to their website and looked at the 2004 annual report. There were a number of interesting tidbits such as the company being under SEC investigation for a number of things, primarily getting money and not reporting it. It was forced to restate its corp statements for 2002 and 2003.
Of course, there are also shareholder lawsuits and ERISA lawsuits relating to the mismanagement of the company. There was an interesting statement as to the reason the pension fund has been underfunded. It was because management assumed a 9% growth rate of the pension fund from 2000 to 2004 when interest rates were about 2%. Of course, this was so the company would appear to be more profitable and the execs could cash in their stock options.
Interestingly enough, the company paid dividends of $157 million the last couple of years eventhough the company was apparently teetering on the edge of bankruptcy. Dividends are supposed to be paid out of profits, not the pension fund.
Also of intest is that the compensation of the directors is not found anywhere on the website. The links to the appropriate SEC filings go no where.
And righties wonder (or spin) why everyone isn’t screaming Amen to the (booming for business) economy, or why policy written by business lobbyists without union representation makes Americans suspicious. Go figure.