CORPORATE GREED: ONE (VERY CAPABLE) AUTO CEO's VIEW
Chrysler CEO, Sergio Marchionne, slams income disparity
Sergio Marchionne, chief executive of Chrysler Group LLC and Fiat SpA, told business leaders Tuesday they have a "moral responsibility" to address the growing income disparity between the rich and poor that is at the heart of the current Occupy Wall Street movement by curtailing excessive executive compensation and corporate greed.
At the same time, he said he would be seeking concessions in 2012 from his own workers during Chrysler's coming round oflabour negotiations with the Canadian Auto Workers.
While Mr. Marchionne acknowledged the Occupy Wall Street movement itself was at times incoherent, its central tenants of addressing the wealth gap and corporate greed need to be addressed, something he has witnessed himself at a board level over the years.
"I have seen an incredible amount of corporate greed sitting on these boards," he said after a speech at the Canadian Institute of Chartered Accountants in Toronto. "Things that I never thought were possible. I have seen the most inane displays of greed for the last 10 years, and I think that must stop."
"If it doesn't stop, the movement will continue. It will continue to get stronger."
Mr. Marchionne said he didn't believe this needed to be addressed by government intervention, but rather at the board level. In fact, he said U.S. President Barack Obama's support of the Occupy movement was "somewhat unhelpful:'
"As much as you may agree with the ideological level, you cannot agree with the form of the protest. Not if you're the president of the United States," the high profile Italian-Canadian executive said.
That is why he encouraged business leaders to address the "root" of the issue at the board level or risk having legislation forced upon them.
"One of the things that also has to be looked at is the whole issue of executive compensation:' he said. "It's very, very difficult to have discussions with organized labour about pay packages when you have fundamental inequalities in the system."
Despite Mr. Marchionne eloquently quoting Pierre Trudeau, Leo Tolstoy and Nelson Mandela in his speech in Toronto, he is hardly the everyman himself. He made roughly €3.47-million [$4.9-million] as the head of Fiat SpA, Fiat Industrial and Chrysler in 2010.
At the same time, Mr. Marchionne said he would be looking for concessions from the CAW in their upcoming round of labour negotiations in 2012. He has also been on the record saying he does not support the two tier wage system adopted by Chrysler workers in the U.S., and would like to see a single wage that is lower than the top tier.
"I don't like the notion of entitlement either:' he said. "If we're all in the same boat, then if I'm doing well I will pay you much more than you would have gotten as a tier one. But if we're in the sewers, don't expect your role preserved when everyone else is drowning:'
He said that might come in the form of incentives, or profit sharing. But he said the Canadian workers would have to be at least as competitive as their counterparts south of the border if they wanted to continue to win new work, especially now that the dollar is not providing a buffer for manufacturers here.
While he thanked the Canadian and Ontario governments for the $2.9-billion bailout package they gave Chrysler in 2009 during its restructuring, he said Chrysler would be making product decisions based on economics going forward and that Canadian operations needed to be as competitive as the U.S. operations, where wages are substantially lower, to win work. "You cannot have all things. You cannot have a strong currency, cannot have an uncompetitive wage rate and expect Chrysler or all the other car makers to keep on making cars in the country," he said.
But Ken Lewenza, CAW president, said Mr. Marchionne had better get "concessions" out of his vocabulary heading into the negotiations next year.
''When he makes those kind of comments, then I have to obviously educate him on the productivity of our workforce, and the quality of our workforce, because when it comes to compensation, there is a correlation between good productivity and our compensation:' he said. "I was always told by the Chrysler management team that as long as you're productive, wages aren't on the radar screen."
Nov. 23, 2011
Posted by BEYOND RISK at 11/23/2011