As chieftains for the nation's top automakers made a second appeal to lawmakers Tuesday for $25 billion in federal help, their plans included an element first suggested by Montana's Democratic Sen. Jon Tester last month: slash chief executive pay to a buck a year.
Ford's chief executive Alan Mullaly announced a plan early Tuesday to sell corporate jets and take a $1 a year salary if his company has to tap into a hoped-for $9 billion "stand-by" federal loan.
GM's CEO Rick Wagoner also pledged Tuesday to pay himself just a dollar.
Chrysler CEO Robert Nardelli previously agreed to the idea last month.
Reached Tuesday at his office in Washington, Tester said he was pleased the top brass had got the message, but said much more is needed from Detroit's Big Three before Congress is ready to sign off on another high-priced taxpayer bailout.
Still, he said, the salary is "more than just symbolic. They need to have some skin in the game."
Tester serves on the Senate Banking Committee. Top brass for the Big Three appealed to his committee two weeks ago for a $25 billion federal package, saying the American auto industry may not be able to weather the ongoing economic storm without help. When they appeared Nov. 19, all three had come to Washington on private jets, costing "$20,000 just to get here," Tester said.
Nearing the end of the four-hour hearing, Tester asked each if they would be willing to follow the lead of then-Chrysler CEO Lee Iacocca, who didn't take more than a dollar in compensation in 1979 when his company needed federal help to survive.
Back then, Tester said, the CEOs seemed "wishy-washy" on the idea.
This time, the three CEOs are foregoing air travel altogether and are driving the 520 miles to Washington to Banking Committee hearings this week.
Tester said he is still going over the Ford and GM plans, which were released Tuesday, but he said that asking a Montana taxpayer who earns $35,000 to "bail out the guy who makes seven, eight figures is a non-starter."
The matter goes before the Banking Committee on Thursday.
Tester, who in October voted against the successful $700 billion tax bailout of the nation's banking sector, said lawmakers' experience with that federal lifeline has given him some lessons on how an automotive bailout, should one materialize, ought to work.
For one thing, Tester said, it needs to include more federal oversight. The financial bailout package has changed dramatically since lawmakers passed it.
Twenty-five billion dollars "is a lot of dough," Tester said. "We need to make sure we're not back here in a year" doing it again.
Posted in State-and-regional on Wednesday, December 3, 2008 12:00 am
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