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."


Scott Deveau
Financial Post
Nov. 23, 2011

CHARACTER AND PURPOSE - IN LIFE AND IN DEATH: STEVE JOBS

A Sister’s Eulogy for Steve Jobs


Then, Steve became ill and we watched his life compress into a smaller circle. Once, he’d loved walking through Paris. He’d discovered a small handmade soba shop in Kyoto. He downhill skied gracefully. He cross-country skied clumsily. No more.


Eventually, even ordinary pleasures, like a good peach, no longer appealed to him.


Yet, what amazed me, and what I learned from his illness, was how much was still left after so much had been taken away.


I remember my brother learning to walk again, with a chair. After his liver transplant, once a day he would get up on legs that seemed too thin to bear him, arms pitched to the chair back. He’d push that chair down the Memphis hospital corridor towards the nursing station and then he’d sit down on the chair, rest, turn around and walk back again. He counted his steps and, each day, pressed a little farther.


Laurene got down on her knees and looked into his eyes.


“You can do this, Steve,” she said. His eyes widened. His lips pressed into each other.


He tried. He always, always tried, and always with love at the core of that effort. He was an intensely emotional man.


I realized during that terrifying time that Steve was not enduring the pain for himself. He set destinations: his son Reed’s graduation from high school, his daughter Erin’s trip to Kyoto, the launching of a boat he was building on which he planned to take his family around the world and where he hoped he and Laurene would someday retire.


Even ill, his taste, his discrimination and his judgment held. He went through 67 nurses before finding kindred spirits and then he completely trusted the three who stayed with him to the end. Tracy. Arturo. Elham.


One time when Steve had contracted a tenacious pneumonia his doctor forbid everything — even ice. We were in a standard I.C.U. unit. Steve, who generally disliked cutting in line or dropping his own name, confessed that this once, he’d like to be treated a little specially.


I told him: Steve, this is special treatment.


He leaned over to me, and said: “I want it to be a little more special.”


Intubated, when he couldn’t talk, he asked for a notepad. He sketched devices to hold an iPad in a hospital bed. He designed new fluid monitors and x-ray equipment. He redrew that not-quite-special-enough hospital unit. And every time his wife walked into the room, I watched his smile remake itself on his face.


For the really big, big things, you have to trust me, he wrote on his sketchpad. He looked up. You have to.


By that, he meant that we should disobey the doctors and give him a piece of ice.


None of us knows for certain how long we’ll be here. On Steve’s better days, even in the last year, he embarked upon projects and elicited promises from his friends at Apple to finish them. Some boat builders in the Netherlands have a gorgeous stainless steel hull ready to be covered with the finishing wood. His three daughters remain unmarried, his two youngest still girls, and he’d wanted to walk them down the aisle as he’d walked me the day of my wedding.


We all — in the end — die in medias res. In the middle of a story. Of many stories.


I suppose it’s not quite accurate to call the death of someone who lived with cancer for years unexpected, but Steve’s death was unexpected for us.


What I learned from my brother’s death was that character is essential: What he was, was how he died.


Tuesday morning, he called me to ask me to hurry up to Palo Alto. His tone was affectionate, dear, loving, but like someone whose luggage was already strapped onto the vehicle, who was already on the beginning of his journey, even as he was sorry, truly deeply sorry, to be leaving us.


He started his farewell and I stopped him. I said, “Wait. I’m coming. I’m in a taxi to the airport. I’ll be there.”


“I’m telling you now because I’m afraid you won’t make it on time, honey.”


When I arrived, he and his Laurene were joking together like partners who’d lived and worked together every day of their lives. He looked into his children’s eyes as if he couldn’t unlock his gaze.


Until about 2 in the afternoon, his wife could rouse him, to talk to his friends from Apple.


Then, after awhile, it was clear that he would no longer wake to us.


His breathing changed. It became severe, deliberate, purposeful. I could feel him counting his steps again, pushing farther than before.


This is what I learned: he was working at this, too. Death didn’t happen to Steve, he achieved it.


He told me, when he was saying goodbye and telling me he was sorry, so sorry we wouldn’t be able to be old together as we’d always planned, that he was going to a better place.


Dr. Fischer gave him a 50/50 chance of making it through the night.


He made it through the night, Laurene next to him on the bed sometimes jerked up when there was a longer pause between his breaths. She and I looked at each other, then he would heave a deep breath and begin again.


This had to be done. Even now, he had a stern, still handsome profile, the profile of an absolutist, a romantic. His breath indicated an arduous journey, some steep path, altitude.


He seemed to be climbing.


But with that will, that work ethic, that strength, there was also sweet Steve’s capacity for wonderment, the artist’s belief in the ideal, the still more beautiful later.


Steve’s final words, hours earlier, were monosyllables, repeated three times.


Before embarking, he’d looked at his sister Patty, then for a long time at his children, then at his life’s partner, Laurene, and then over their shoulders past them.


Steve’s final words were:


OH WOW. OH WOW. OH WOW.


Mona Simpson is a novelist and a professor of English at the University of
California, Los Angeles. She delivered this eulogy for her brother, Steve Jobs,
on Oct. 16 at his memorial service at the Memorial Church of Stanford University.
October 30, 2011

ROBERT FULFORD: AMERICA HAS SMALL LEADERS TRYING TO DEAL WITH BIG PROBLEMS

As a lifelong admirer of American culture and institutions, I find it painful to follow the 2012 political cycle. What malign convergence of forces has left the Republican Party with the pathetic array of would-be leaders now seeking the presidential nomination? Lined up in a row of seven or eight on a stage in somewhere like Ames, Iowa, or Orlando, Florida, they make an appalling spectacle — though they are not the worst problem facing America at this moment.


These hopefuls are a solemn, unimaginative lot. They apparently have little on their minds but themselves, their enemy in the White House and their hope of tricking one of their competitors into making an embarrassing gaffe or confession.


Two leading candidates, Governor Rick Perry of Texas and House Representative Michele Bachmann of Minnesota, both express wildly optimistic ideas about what they could do in White House. They’ll cut taxes, cut the public sector and have the country prospering in no time.


Perry and Bachmann, proud Christians, have followers belonging to cults that might generously be described as eccentric. For instance, C. Peter Wagner, a Colorado evangelist who took part in Perry’s prayer meeting (“for a Nation in Crisis”) at Reliant Stadium in Houston, advocates Christian control of government; he also wants to burn the statues of Catholic saints. Perry doesn’t necessarily agree with people like Wagner but he says he’s glad to have their support and he certainly won’t say a word against them.


Mitt Romney, who is now sometimes mentioned as the inevitable nominee, lost the nomination to John McCain in 2008 and has been running this time for a year. But after all that strenuous effort he’s not impressed most of his fellow Republicans. About a fifth of them support him, the same proportion he had on his side a year ago.


He’s bland, almost as if determined to be ordinary. He remains widely unloved. A Washington Post story expressed this in extreme understatement: He “has stirred only limited passion.” Anyone with a TV set knows why. He’s smug and priggish, annoyingly condescending. He knows he’s the smartest man in the room and finds it impossible to keep that opinion to himself.


Reluctantly, the Republicans seem to be accepting him, as their not-too-bad candidate. David Brooks, whose New York Times column often projects a lively and original view of the future, considers Romney the man for the moment. He’s a technocratic manager, an effective executive, an Organization Man. He’s sophisticated enough to work the system and put through the policies the current crisis calls for.


It’s sad t see Brooks settling, 13 months before the election, for the minimum candidate. Apparently he believes the U.S. has had enough excitement and too many failures. He’ll be satisfied with a politician who can deliver what Canadians traditionally expect, what the British North America Act calls “Peace, order and good government.”


Most Republicans expect they can beat Barack Obama and he’s done little to demonstrate that they are wrong. Even among Democrats, only 58% think Obama will be re-elected. About six out of 10 Americans disapprove of the way he’s handling the economy and seven out of 10 say the country is on the wrong track.


Confidence Men, Ron Suskind’s recent book about economic arguments in the White House, depicts Obama as a novice manager unable to deal with serious trouble. Suskind quotes Lawrence Summers, the senior economic advisor: “We’re home alone. There’s no adult in charge.” He’s denied he said it but those words not only sound like Summers, they sound like the truth. The Democrats are led by a man who knows little about management and apparently has no interest in learning.


Still, political leadership isn’t America’s core problem. The paralysis now afflicting the U.S. is the result of many Americans believing that they can spend more money they have and defer repayment indefinitely — a governing principle that operates as much in government as in private households.


Most of the West (including Canada) makes the same mistake, sometimes with dire consequences. But in America everything happens on a grander scale, with gargantuan results. And any serious failure affects much of the world.


The American fiscal tragedy is American made, the result of chronic long-term thoughtlessness. Do the Americans know this yet? Apparently not. Leaders brave enough to break the news to them might be able to lead the country toward better days but no such leaders are on the horizon. A close study of those now offering themselves provides, in this melancholy year, no clear basis for hope.


Robert Fulford
National Post
Oct 8, 2011

THERE'S NOTHING ROMANTIC ABOUT MONEY: MAKE SURE YOU ARE FINANCIALLY ALIGNED

Failing in love and getting married is arguably one of the most exciting times of your life. The dating years seem to prepare us well for selecting a mate. By the time you find the person of your dreams, you've likely gone through enough heartbreak and mistakes to know who your ideal emotional companion is. But the cold, hard - often unspoken - truth is that in a marriage, emotional compatibility is only half the equation. Anyone who's been married for any length of time knows this all too well: financial compatibility is just as important, maybe more so. Love does not conquer all, and financial misalignment can destroy a union.

The bottom line really is that you need to ensure you're financially aligned before you get married. This means full financial disclosure on both sides and honest conversations about your life goals and how you're going to get there - together. It's that simple, but it's hard for people to do. As open as we've become as a society - just think about how much we're willing to share on Facebook and Twitter - we are simply not comfortable talking about our finances, not even with the single most important person in our lives. It's shocking. But consider this: If you do bite the bullet and have those tough conversations, hash it out, come to a consensus, map out a life plan and stick to it, then, wow, do you ever have something to be excited about.


So, where should new couples start to figure it out?


First, by coming clean on their personal balance sheets - what they own and what they owe, including student loans and all credit card debt. This doesn't mean you suddenly need all of your money in joint accounts; however full disclosure at the outset and throughout the relationship is critical. Cash flow is another conversation - is your soulmate spending more than he earns, what is he spending it on? If you are planning a wedding and discover that you're both in debt, does it really make sense to buy a big engagement ring, throw an elaborate celebration and sink further into debt? The answer may be a smaller, more low-key celebration, or fewer guests. According to Weddingbells' Annual Reader Survey the average expected cost of a wedding in 2011 was $23,330. That's a lot of money that can be put towards building your future or paying down debt.

Another option some people consider is living together before marriage - and holding off on the wedding until you are in better financial shape. While I recognize that it's not an option for some people given their personal beliefs, I think it's a relatively low-risk way to really determine if you and your partner are financially aligned. Living together, whether married or not, puts theory into practice and makes you fully accountable to your partner. And, it may uncover fundamental differences. I would argue that you're better off knowing that ahead of time than finding out when you're already married.

Whether you choose to live together or get married, once you've come clean on your financial situation, it's time to talk about the future. What are your life goals? Do you want one kid, two kids, no kids? Do you want to vacation every year? Where do you want to live? The answers to those questions come with a budget number attached. And you need to make sure that you're grounded in reality when you're budget planning and setting goals. You may even want to consider a marriage contract. Michael Cochrane, a prominent family lawyer, is an advocate of marriage contracts as a way to provide clarity and focus.

"A marriage contract at the outset of a marriage or even to restore financial balance after one spouse has had problems can be a tool for strengthening a marriage by creating a clear realignment of the partners' goals"

It's tough. There's nothing romantic about money.

It's not why you fell in love and wanted to get married. But getting it right can help ensure you stay married, and happily so.


Patricia Lovett - Reid
Financial Post
October 8, 2011


Patricia Lovett-Reid, senior vice-president, TD Waterhouse, is one of Canada's leading and respected authorities on personal finance

OSC CONSIDERING FIDUCIARY DUTY FOR DEALERS AND ADVISORS: A MOVE TOWARD A UNIFORM PLATFORM FOR PROFESSIONAL PRACTICE IN FINANCIAL SERVICES

Discussion paper will summarize the fiduciary duty debate at home and abroad and identify the key issues involved


The Ontario Securities Commission will publish a discussion paper examining whether to impose a fiduciary duty of dealers and advisors later this fall, the regulator said Monday.


In a staff notice detailing the work of the OSC’s compliance branch over the past year, the commission indicates that it is “considering whether an explicit legislative fiduciary duty standard should apply to dealers and advisers in Ontario”.


The OSC promised earlier this year, in its statement of priorities, that it would study the issue. That pledge came in response to calls from investor advocates, including the Canadian Foundation for Advancement of Investor Rights and the OSC’s Investor Advisory Panel, to look at whether advisors should be required to act in their clients’ best interests (a more stringent standard than the suitability standard that currently applies).


In the branch report, the OSC says that it intends to publish a discussion paper on fiduciary duty in the fall of 2011 “that will summarize the fiduciary duty debate (both domestically and internationally) and identify the key issues involved.”


It notes that it has been monitoring the fiduciary duty debate in Canada and internationally, and recent rule developments in the United States, Australia and the UK related to fiduciary duty.


“Recently, there have been important international developments on the issue of fiduciary duty,” it says, noting that the U.S. Securities and Exchange Commission is expected to introduce rules in 2012 that would create a common statutory fiduciary duty for investment advisors and broker-dealers when they are providing personalized advice to retail clients. In Australia, the government is also expected to introduce legislation in 2012 that will make advisors subject to a fiduciary duty when dealing with retail clients.

James Langton

Investment Executive
September 26, 2011

SHOULD WE RAISE TAXES ON THE RICH?

Not since the Gilded Age plutocracy of a century ago has there been such a near consensus as there is today in North America on the need to raise taxes on the rich.


Warren Buffett was pushing on an open door with his heavily Tweeted recent op-ed in The New York Times Calling for higher taxes on himself and fellow billionaires.


"While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks;' wrote the controlling shareholder in scores of iconic American firms ranging from Dairy Queen to the Burlington Northern Santa Fe railroad.


"My friends and I have been coddled long enough by a billionaire-friendly Congress;' wrote Buffett, whose tax rate last year was just 17 per cent, compared with an average of 36 per cent for his colleagues at Berkshire Hathaway Inc.


"It's time for our government to get serious about shared sacrifice:'



Buffett no doubt braced for a backlash from the affluent And Conrad Black, for one, has fretted that Buffett is exhorting lawmakers into a "tokenistic fiscal persecution of the most affluent" - a demographic to which the disgraced former press baron remains loyal, though his membership has lapsed.


But the real story here is the scarcity of objections to Buffett's call for a level playing field, in which all income groups are able to participate fully in society.


Business is in such bad odour that realistically the most it carl ask of others today is what used to be called Christian forbearance. Or to agree with Buffett.


U.S. financier Eli Broad says, ''We've been coddled long enough and have tax breaks that 99.9 per cent of the public don't have, and it's not fair:'


Hedge-fund manager George Soros adds: "The rich are hurting their own long-term interests by their opposition to paying more taxes."


The distemper of these times, as Peter C. Newman labelled the social upheaval of the 1960s, is popular distrust of most institutions, including politics, organized religion, the medical-industrial complex and the news media.



Business perhaps looms largest in the rogues' gallery. This isn't the place to recite its rap sheet Mere mention will do of the job-killing Great Recession triggered by errant tycoonery in global financial centres. Saving the world economy from that explosion of reckless greed has so far cost the U.S. alone about $2 trillion in taxpayer-funded Wall Street bailouts.


Business leaders have to grasp that in recent years free enterprise misconduct has come so fast and ruinous that it's a blur. Tepco's inadequately maintained Fukushima nuclear power plant, BP's Gulf of Mexico oil spill, Massey Energy's mining tragedy in West Virginia, the fiscal villainy of war profiteers Halliburton and Blackwater - these all now seem preordained.


Business CEOs now pay themselves 325 times the compensation of shop-floor and cubicle workers. That ratio was closer to 25- to-1 in the 1960s. One cannot sustain an argument that business CEOs are now 300 times smarter than they were a half century ago, before they began "offshoring" manufacturing jobs or being stupendously rewarded for incompetence.


When they were shown the door at Citigroup Inc., Merrill Lynch Inc. and Countrywide Financial Inc. in the late 2000s, the malfeasant CEOs of those enterprises left with parting gifts of $147 million, $162 million and $145 million respectively.


The scandal besieged Rupert Murdoch has paid himself $33 million for fiscal 2010, a 47 per cent increase. The "pay for performance" canard espoused by its fattened business beneficiaries is honoured far more in the breach than the observance.


Bruce Bartlett, a veteran of the Reagan and George H.W Bush administrations, has compiled 23 polls on deficit-reduction over the past nine months. He found a consistent 2 - to - l support for tax hikes on the wealthy. He calculates that without George W. Bush's tax cuts of 2001 and 2003 skewed to the rich, "federal revenue would have been more than $166 billion higher in 2008 alone" - enough to reduce the deficit by about 10 per cent.


The anti-tax brigade casts all tax hikes as 'Job killers." That is nonsense. In the era before runaway pay for CEOs and higher top marginal tax rates in 1980s and 1990s, the US. economy created nearly 40 million net new jobs. The salient backdrop for the current distemper is a 30-year stagnation in middle-class incomes, while prices for fuel, shelter, tuition and even food have been soaring.


The gap between rich and poor has widened markedly in Canada, where the top 1 per cent of income earners accounts for almost 40 per cent of total national income. That same top 1 per cent collected one - third of growth in national income between 1998 and 2007. In the 1950s and 1960s, that figure was a mere 8 per cent.


Depending on which of the conventional measures of poverty one uses, there are between 3.2 million and 4.4 million Canad.ians living in poverty.


In a Star op-ed last month, Larry Gordon, co-founder of Canadians for Tax Fairness, a group advocating a more progressive tax system, plaintively asked, ''Where's Canada's Warren Buffett?"

Best to ask Ed Clark, CEO of Toronto-Dominion Bank. In February of last year Clark told agathering in Florida that he'd canvassed fellow members of the Canadian Council of Chief Executives, and that almost all had said "raise my taxes" as their contribution to erasing the federal deficit caused by the global credit meltdown.


It took the federal Tories' attack machine just one week to fire off an email to MPs and party supporters accusing Clark of shilling on the Liberals' behalf for "massive new tax hikes on working- and middle-class Canadians."


That was a jaw-dropping slander of both Clark and the Liberals. But it shut up Clark, whose highly regulated firm can't afford to be on the wrong side of the federal government of the day.


The Conference Board usefully calls for a discussion on the efficacy of the 189 tax loopholes in current legislation, and the attractive alternative of a higher basic exemption. The Canadian Centre for Policy Alternatives would add an examination of the deleterious effects of El and welfare programs grown miserly in the past decade, and the impact on income inequality caused by tax policy changes favouring the aftluent.


We can have that discussion peaceably in school auditoriums across the country. Or we can have it in the streets. But there will be a reckoning, because the status quo is untenable.


David Olive
Toronto Star
09 10 2011

STOP CODDLING THE SUPER - RICH: BUFFET

A classic example of contributing to the Greater Good

BANGALORE (Reuters) - Billionaire Warren Buffett urged U.S. lawmakers to raise taxes on the country's super-rich to help cut the budget deficit, saying such a move will not hurt investments.


"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice," The 80-year-old "Oracle of Omaha" wrote in an opinion article in The New York Times.


Buffett, one of the world's richest men and chairman of conglomerate Berkshire Hathaway Inc , said his federal tax bill last year was $6,938,744.


"That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income - and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent," he said.


Lawmakers engaged in a partisan battle over spending and taxes for more than three months before agreeing on August 2 to raise the $14.3 trillion U.S. debt ceiling, avoiding a U.S. default.


"Americans are rapidly losing faith in the ability of Congress to deal with our country's fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness," Buffett said.


Buffett said higher taxes for the rich will not discourage investment.


"I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain," he said


"People invest to make money, and potential taxes have never scared them off."

Rogers Yahoo Finance
Reuters
Aug. 15, 2011