Mirror, Mirror on Big Ed's Wall
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Somewhere in Ed Whitacre's house in San Antonio I imagine a mirror. It's a magic one, like the ones in fairy tales.
"Mirror, mirror on the wall," Ed must have asked, "Should I become Chairman of GM? I don't really know anything about the auto business and the last company I built up has the worst record for customer service in the known universe."
"Don't worry, Big Ed," the friendly mirror advised. "A good manager can manage anything. Pay no attention to Robert McNamara and his time at Ford. Besides, the money's good."
Ed frowned. "But I really like San Antonio. I don't want to live in nasty old Detroit."
"Oh, Ed," the mirror sounded disappointed. "You can use a private jet from ATT that's part of your retirement package."
So Big Ed took the job and the big paycheck. But he was anxious for big results quickly. When he got back home to San Antonio, he returned to the mirror.
"Mirror, mirror on the wall," he said, "I've fired Fritz Henderson and searched for a new CEO for a whole month. I think I could be CEO, even though I don't know beans about the auto business."
"Ed, Ed, Ed," the mirror sighed. "Of course you can be CEO. You'll make even more money. Don't worry about salary caps, either. The Pay Czar will give you an exemption. And you can hire Henderson as a consultant to back up your personal advisor."
So Big Ed became CEO. Soon he was back in San Antonio and facing the mirror, again.
"Mirror, mirror on the wall," he said, "I'd like to be spokesperson for GM, just like Lee Iacocca."
"Don't worry, Ed," said the mirror. "You'll make a great spokesperson. Just remember, Iacocca was the spokesperson for Chrysler."
This is how you came to see Big Ed on your TV. He's shambling toward you through the cleanest and quietest auto plant on the planet. He even "wrote" an Op Ed piece in the Wall Street Journal, published with the title, "The GM Bailout: Paid Back in Full."
This is crap. The bailout hasn't been paid back in full. That would be north of $50 billion.
The loan portion is only a little more than $8 billion. It's about 14 percent of the total, if you're counting.
Maybe the mirror doesn't have a problem with all of this. But I do.
I have a problem with the idea that it's OK when the CEO of a company we taxpayers gave $50+ billion to lives and acts like a corporate pasha.
I have a problem when the company that got bailout funds also gets exemptions from the salary cap rules.
And I have a problem when people lie to me. Of course, technically, Ed told the truth. He never said that the bailout had been repaid, only the loans. But, clearly, that wasn't the impression he wanted to leave.
He was trying to slip something by you and me and the people who've lost their jobs in the GM restructuring. That's a lie and it's wrong no matter how exalted your status or how many exemptions you get from the rules others have to follow.
Maybe, what the mirror said to Big Ed was, "Just declare victory, Ed. You'll look good. And those dummies will never catch on."
Wally's Working Supervisor's Support Kit is a collection of information and tools to help working supervisors do a better job. It's based on what Wally's learned in over twenty years of supervisory skills training. Click here to check it out.
Categories: GM, compensation, CEO, Leadership, Auto Industry
Tags: Ethics Business Leadership
Wally
A effective and readable way to capture an important cultural dynamic. People are angry towards bankers and other winners in the bailout because the outcomes violate a sense of fairness. Individuals make huge bonuses because the US govt subsidizes banks through extra-low interest rates. Altho many can get behind saving the auto industry, they can't condone individuals gaining unearned wealth by standing in the right place at the right time.
A lot more transparency is necessary when public money is driving the agenda.
All the best,
Michael
www.workengagement.com
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I agree, Michael. I also think that people often feel like many companies set out to manipulate them. Check out Bob Sutton's recent post on ATT sales tactics, for example. There's also the issue of relative reward. When CEOs make hundreds of times what the average worker takes home and get paid their "bonus" even when targets aren't met, people get angry. They get angrier when their salaries and bonuses are cut and their friends or family are laid off, while the fat cats get even fatter.
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Wally, your "mirror mirror on the wall" analogy is oh so "right on." And in the case of Ed Whitacre, I'm concerned that he actually believes he is the fairest one of them all.
And for me, that is a problem. Because for GM to truly reemerge from their many challenges they need honesty, humbleness and leadership. And I'm afraid that Whittacre fails on many counts here.
But here is the really sad part - and this being the awareness of the general public. Last night when a friend saw the GM commercial you're referring to, their comment was, "I didn't know that." I proceeded by informing them of the twisted truth that Ed was speaking. I'm concerned that gibberish like this advertisement actually sells. And that is a problem in my book.
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You make several good points, Rodney. Thanks. The spark for that post came from a friend who saw that commercial and commented to me that it was great that GM had already repaid the bailout money. Whitacre is very careful to tell the precise truth. He only mentions repaying the loans. But he doesn't tell the whole truth which is that over $50 billion of taxpayer money has gone into bailing out GM.
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Great narrative Wally. Made me laugh.
Although this is probably a knee jerk reaction, CEO's, like Ed, strike me as being completely clueless, regarding the internet and its effects on exposing a lack of transparency by companies and their CEO's.
By last week's end, my feed reader had several posts, from separate sources, exposing GM's loan payback fallacy.
It's a shame, too. The red Malibu in the TV ad sure looked pretty.
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Thanks for those comments, Tim. It's interesting to compare Iacocca as spokesperson for Chrysler to Whitacre for GM. Iacocca took a $1 per year salary as a symbolic gesture. His contract paid off big when Chrysler succeeded. And, while GM's slogan is "May the best car win," Chrysler's was "If you can find a better car, buy it."
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Heheh, Whiteacre's mirror must be closely related to John Thane's and a number of others.
Now all I have to do is figure out where/how to order mine
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You're right, Miki. There must be a special Imperial CEO mirror store somewhere. If not, it's surely an entrepreneurial opportunity.
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Great post Wally. That mirror must be magic, for I have no other answer for how GM managed to hang on. I wonder how many folks just take the "we've turned the corner" ad at its face value without ever looking around?
So much for transparency...
Thanks!
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Thanks for commenting, Landon. At the end of the ad, Whitacre says, "We want to exceed all expectations." I wish that honesty was on his list.
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Thanks for commenting, Landon. At the end of the ad, Whitacre says, "We want to exceed all expectations." I wish that honesty was on his list.
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I really like the title of the post! This is very interesting to read and does teach us many things.
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