GM Caps Workers' Wages for 2011
When GM and Chrysler were bailed out in 2009, the government capped the pay of their executives. For once, the top management team had to work for what they earn. Speaking at the Washington Economic Club on Friday, Ackerson said the measure had crippled the company’s ability to attract new talent. Probably because that’s what people expect from management positions: infinite resources, and "greater flexibility".
"We're starting to lose some of those key people to elsewhere," argued Ackerson.
Later on, Ackerson met with the Treasury Department's Pat Geoghegan, who is overseeing executive compensation at bailed-out companies. A Treasury spokesman said Geoghegan "routinely meets with executives on these matters." Ackerson wouldn’t comment on the meeting, but we can safely assume he requested increased compensation of top executives.
The “no raise” news surfaced as the GM Foundation announced it was giving $27.1 million to the United Way of Southeastern Michigan to help improve graduation rates at Detroit schools. The foundation is gradually ramping up charitable spending again, focusing on education, according to Mark Reuss, GM's North American president and a member of the foundation's board.
"Although the new GM has made significant progress, the auto business remains extremely challenging, and it is important that we control costs in every area of our business," said GM spokesman Tom Wilkinson.