Tuesday, October 11, 2005

"The Industry is at a Crossroads"

I think, on the basis of that statement alone, that Miller should be tossed. The auto industry in America was at a crossroads, about 12 years ago, and they took the wrong turn. Miller continues to fight for his executives though, which lets you know just how testy things are right now. The funniest defense of executive bonus packages I've heard in awhile:
As a result of the debtor's financial performance, many of the company's incentive-based compensation programs failed to provide (its) salaried and executive work force with total compensation that is competitive with the industry norm
Industry norm? Hmmm. Is it the "norm" to drive a billion dollar baby into the ground in six years? Is it the norm to issue over $5B in debt, default on it, and then give yourself a pay raise? According to this article, Miller keeps the charade up though:
Miller said Delphi was now paying roughly market value for most salaried employees but below market for top executives. In exchange for a longer severance period, executives agreed not to work for competitors.
Work for competitors? Look, I'm an investor in these "competitors" as well as in Delphi, and the last thing the competition wants is a bunch of Delphi executives swamping their life raft. I really think creditors should try to pull this out from underneath the DIP. There are a couple of really good business lines at Delphi, and Miller seems incapable of figuring out how to extract that value.