Wednesday, September 06, 2006
"A plan to pay millions of dollars to the top officials of the Dana Corporation, the auto parts company [now in bankruptcy], violates the new bankruptcy law and cannot go forward, a judge ruled yesterday...Judge Burton R. Lifland of the Federal Bankruptcy Court in Manhattan said that the proposal was an illegal plan to retain Dana’s chief executive and other top executives."
Now read this comment made by he chairman of Dana’s compensation committee:
“If you can’t pay an individual a fair wage, and they’re in the middle of a Chapter 11 under tremendous pressure, it seems only logical that they would begin looking around…”
He added that Dana's CEO 'had repeatedly expressed fears that some of his top executives would leave if their pay could not be raised to the levels previously expected.'
And that's a bad thing? Why are these executives still there after driving the company into bankruptcy? Why weren't they urged to start "looking around" when their performance was declining? When lower-level employees don't meet their objectives, they're put on development plans and their employment is eventually terminated if they don't start doing their part to do to help the company stay solvent. But executives get away with poor performance? It would make more sense if an executive staff that causes a bankruptcy got ousted.
Reorganizations under Chapter 11 might be handled better by a professor with a team of business graduate students.
Now imagine being an employee and knowing that no matter what financial promises your employer makes, in exchange for a lifetime of work, and in writing, those promises mean nothing. Imagine your retirement years, when you can no longer earn an income and have planned your survival based on your employer's pension promise that never comes through or is rescinded. Imagine your employer, unable to do a good enough job to sustain your company's health, riding off into the sunset with your money in the side bags leaving you in the dust—a ward of the government.
Wait, we don't have to imagine these things at all…it's the American way! What do they call it in societies where there's a wealthy class protected by government and everyone else becomes a ward of the state? Capitalism? I think not. Step by step, it seems that we're moving in that direction. Those who work at jobs to earn a living are setting themselves up to become wards of the state. Today, it's pilots who worked for Delta whose only-partial-pensions will now be paid by the government through the Pension Benefit Guarantee Corporation (PBGC).
How much of this debt-dumping do we have to see before we declare that the system of employer-provided benefits does not work? Privatization of funding for essential services seems to serve only the investors—the government ends up paying anyway…but not the full amount due.