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FCA quality: lousy scores

Discussion in 'Mopar / FCA News' started by valiant67, Feb 22, 2017.

  1. Rick Anderson

    Rick Anderson Well-Known Member

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    Usual the idea is, the Board of Directors is made up of people that don't need a job at the company. Erik touched on it. But the board is to oversee the company, either an advisory or supervisory role, or some mix of both. They don't get involved in day to day operations.

    Often board members sits on several boards for several different companies, they are experts that are brought in to advise/oversee the company direction and big decisions.

    They can be a group of accomplished experts and/or people with stake in the company, like majority shareholders (or their representatives), former owners, or the owner/owners that have stepped away from day to day operations.

    I'm sure there are examples of Boards voting themselves huge compensation packages, or executive leadership doing the same, treating the company as their own personal candy store. But I think you'd find in most cases, a board member makes less than the CEO, and should, cause he works less time and may be on several boards already that he splits his time.

    The advantages are, owners can still keep some reign and power on the company without having to be the CEO themselves, and protect their investment/assets in the company. You have expert advisers, that can guide the company. You have a group of familiar experts, that are detached enough, they don't get bogged down in the weeds or crisis management, and may have that benefit to think more strategically and see the forest through the trees, to guide the company better than the guy down in the weeds just trying to make ends meet from day to day.

    That last example may not be a good one for a company like FCA, because if the CEO can't get his head up out of the weeds and see the forest through the trees, FCA is in big trouble, but the board should be able to do that more effectively than the CEO. And usually when you're at that level of a big corporation, the board is made up of stake holders holding the executive team accountable to protect the stake/assets the board members have in the company.
     
  2. JavelinAMX

    JavelinAMX Well-Known Member

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    Well aware of what a Board of Directors actually is, and their intent.

    What I was trying to convey is that a Board of Directors actually do work. Their work * IS * different from a Plumber, Administrative Aide, Assembly Worker, Engineer, or others. They actually do accomplish things.

    But in our parlance, we've put the word 'work' or 'worker' into such a context that people don't seem to consider Decision-making of that ilk to be acceptably described using that word.
     
  3. Rick Anderson

    Rick Anderson Well-Known Member

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    Sorry, hope if didn't come across as talking down to you.

    Yeah, the Board is kinda of the parental supervision. And there have been plenty of company's with bad boards that weakened the company.

    I'm guessing, most huge companies didn't get that way with one owner all on his own, they had investors, loaners and mergers along the way, and likely over generations. So you end up with multiple entities that are all co-owners or at least have big stakes in the company. You can't run day to day operations by committee, so the co-owners, big stake holders put together a "Board" as parental supervision.

    You probably know better than I, Board Members do work, but I guess there work is "different". Some boards its almost a part time job, consultants with power, to keep tabs on the company and meet with the other board members to make decisions by committee.

    Yea, I see your point and have to agree, do people think people just flip a coin to make a decision? Most managers and executives work long hours to stay on top of operations, and when the whistle blows they can't simply drop what is at hand and leave, they often stay late and come in on weekends to make sure things are running smoothly. Everyone complains bad management sinks companies, and if executives and managers do act like people accuse them of acting like, they do sink the company. Most successful, or at least surviving companies have hard working managers/executives. The board, and I'm sure it differs from company to company, they do work, probably not as hard as the Executives/Managers in most cases, and in those cases they often aren't paid as much as the Executives and Managers. They are paid for their knowledge, judgement and experience, if they are doing their job, they are keeping tabs on the company and keeping up with the information about the company. They are looking at all the info, and making good decisions based off the info.
     
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  4. jerseyjoe

    jerseyjoe Plymouth Makes It

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    These guys are not limited to one corporation, lots of friends of management and each other. Not saying all are like that but its something to consider. Lets face it we are all in it for the money and assure our companies survive. Then there CEOs and CFOs and golden parachutes.
     
  5. Zagnut27

    Zagnut27 Jeepaholic

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    Yes. I think people tend to have tunnel vision when it comes to their job. They complain about their bosses, their underlings, and other departments. When you don't understand what someone's job entails including what is and is not within their power, you may tend to beat them up for things they have no control over.

    I've had the benefit of working at all levels of the hierarchy. I've been a grunt at the bottom, staff worker, manager, consultant, and owner/operator. It's certainly given me a better understanding of the big picture. I try to be objective, especially when judging other's performance...and sometimes I give in to human nature and fail miserably...but I still try. And I try to teach the folks I work with what I know about work processes for the various levels of management, especially when they're going on a rant. It tends to open eyes a bit, but not always. Sometimes folks just want their rant, and sometimes the rant is warranted.

    I've had the privilege of participating in several leadership forums for my current employer. I got to work on quality improvement initiatives that included folks from several different departments and even senior leadership within the healthcare system. I was able to see and gain a better understanding of what these folks do as well as what obstacles and difficulties they face. A real eye opener for sure, and an overall beneficial experience!
     
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  6. Rick Anderson

    Rick Anderson Well-Known Member

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    Grass is always greener on the other side of the fence. I've seen lots of Executives/Managers moan about underlings, and state they wish they could just punch a clock, and leave at the end of the day without having to worry about a thing. Of course they forget those wishes when they are hopping out of bed in the morning without a single ache or pain, because their job is not that physically demanding. (at the same time, stress and pressure creates a physical toll, I can attest that getting out of bed in morning during months of extreme job stress and worry, that is not physical work, is not a pleasant experience)

    That is something you see in well lead organizations, low level respect the upper level and upper level respects the lower levels of the organization.
     
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  7. Dave Z

    Dave Z It's me, Dave
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    In a healthy company, being a board member is hard work. I think we can safely say that in some companies, it’s more of another perk of being a well connected executive — GM in 2007 and 2009 comes to mind. They weren’t actually checking on the health of the company, supervising the CEO, etc, as far as anyone can tell.

    I’ve seen the opposite, where board members get a small stipend but work as though it’s their full time job.
     
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  8. Rick Anderson

    Rick Anderson Well-Known Member

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    Funny, and your EGA avatar reminded me of this, if you've ever followed up on any of your old CO's that made general, especially at the higher billets, e.g. Deputy Chief of Staff Air, you'd find they sit on the board of several big companies. I think its part for the expertise and experience the person has, but also the connections the person has over the years, that make them attractive as a board member. I think you see that for some company's, the board members lobby connections they have on behalf of the company.
     
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  9. Rick Anderson

    Rick Anderson Well-Known Member

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    And I bet those kind of board members are part owners, or majority shareholders in the company, that their real financial benefit comes from the company doing well.

    -OR-

    There are some guys that just really love it, and do it just for the passion they have for the industry. Likely already made their fortune and aren't doing it for money, they do it cause they love the company/industry/product.
     
  10. Dave Z

    Dave Z It's me, Dave
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    Or they’re just financial people put onto the board as a quid pro quo for keeping the huge-salary system in place. Often they have interlocking boards of people who vote to give each other massive raises...

    Yes, and I doubt any of them were on the GM board...

    There are people who work and care and maybe miss things... there are others who do not work, do not care, and do not put any effort in. There are lazy UAW workers and lazy board members, the difference is in how much they’re paid... and how much they’re supervised.
     
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  11. Rick Anderson

    Rick Anderson Well-Known Member

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    I know this has happened, and its a perfect example of the leadership treating the company as their own personal candy store, that I mentioned in an early post.

    In the statement I was more thinking the guys that get on the board because they own part of the company. Which makes sense, if you own a big part of the company, you should have a say in how its run. And that's a good thing, a company has a group of people that pretty much own the company, all getting their say, you can't run a company day to day by committee, that'd be a disaster. So you put together a board that appoints a CEO and executive staff, that does the day to day operations. The board decides things appropriately by committee, thus the owners are satisfied their interest are being protected, and its the committee of owners deciding the overall and long term direction of the company, that have every right to do.

    Also keep in mind, big shareholders and part owners can also wreak havoc on a company by threatening to do things with their stocks and stakes in the company if they are not appeased. So putting them on the board makes sense for everyone.

    It can be good and bad, the Board member may only get a stipend for his work, but his real motivation/reward comes from the company doing well and he gets a 100 times more than the stipend back in his investment in the company that does well.

    Of course, Board members may put short term gain over long term, for things like reporting a bad quarter means they have to cancel the new swimming pool they contracted to have put in their backyard, so they use their position to do short sighted things or unethical things to avoid financial losses from their stake in the company. No different than Executives and Managers protecting their bonuses with short sighted or unethical decision making.
     
  12. Dave Z

    Dave Z It's me, Dave
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    In companies that haven’t been around as long as GM, yes, the founders often end up on the board along with big investors. However, as you know and probably have said, often they also have people there because their banks gave loans, their accounting firm is a major vendor, they’re friends with the CEO or other board members, they’re a union rep (rare in the US, mandatory in Germany), etc. With the majority owners of many corporations being index funds...

    Business Week (pre-Bloomberg when they were fairly conservative) and other business publications have been running fact-finding articles and editorials about the quid quo pro boards for decades. Whether by design or not, when you have boards that are mostly CEOs, fund managers, and such, there will be problems relating to ordinary people; and when everyone’s a financier, nobody will understand the reality of the average company, because they do tend to think only in terms of “market realities” (by “market” they usually mean “financial market”). Those would be the kind of people who think Eddie Lampert saved Sears and really means to keep the company going, rather than just use it as a feeder for discounted prime real estate.
     
  13. Erik Latranyi

    Erik Latranyi Allpar Legacy

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    This is starting to get a little political.

    CEOs are not overpaid tyrants who do not care about workers. The average CEO pay is less than $200K in the US and they rarely last more than 2 years. Major union leaders are paid many times that.

    Boards are elected by shareholders in order to look out for shareholders. They do not vote short-term gains for a swimming pool unless all the board members are getting swimming pools at the same time. They may vote for short-term gains to benefit stock holders and that is the weakness in the system.

    Family boards are supposed to be more ethical and looking for the long-term, but I have yet to see anything that support this. It seems they often fall into a similar short-term thinking as everyone else.
     
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  14. Rick Anderson

    Rick Anderson Well-Known Member

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    I think, but don't know, its the Family Boards that are the more likely to treat the company like their own Candy Store and vote themselves big salaries.

    "Billions" is a fictional tv show, but when the Hedge Fund manager said, "How many times have we've seen this in a family business, the first generation starts it, the 2nd generation grows it, the 3rd generation squanders it all". And it very much was the bad situation we've all talk about, the family board and top executives all staffed with family members, the 3rd generation, voting themselves big salaries and making short sighted decisions that was putting the company in jeopardy while they jetted around the country in the corporate jet. Yea, total fiction, but it struck me has very possible and likely has happened more than a few times.

    And spot on about CEO's, granted there are good ones and bad ones, but too many people broad brush them as some sort of boogeymen. Just in the news recently most Union Leaders make more in salary than many CEO's. Heck look into the record, how many unions have had their leadership run amok with paying their own salaries, could there be a reason why organized crime wiggles it way into labor unions so often?
     
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  15. DAGAR

    DAGAR Active Member

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    Encouraging that they are putting forth some effort to address the dealer quality issue - think it will have legs?
     
  16. Dave Z

    Dave Z It's me, Dave
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    What news is this? Oh, the National Review article. “We will take a SELECT group of the best paid union leaders and compare them to ALL chief executives, of companies of all sizes, including that guy who runs Allpar.”

    The article tracks back to another that tracks back to an unlinked article from an anti-union lobbying group.

    As I look through to try to verify the salary of Timothy Canoll, president of the Air Line Pilots Association, which they claim to be $700,000... I find more circular references.

    Here is an actual filing from 2016. https://pp-990.s3.amazonaws.com/2016_10_EO/54-1775762_990O_201510.pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKIAI7C6X5GT42DHYZIA/20170517/us-east-1/s3/aws4_request&X-Amz-Date=20170517T215202Z&X-Amz-Expires=1800&X-Amz-SignedHeaders=host&X-Amz-Signature=1cfa435dd57af5022fa4d8656844c28d69c2d1ddd05661ba4986ef2ec2a55c82

    Tim Canoll’s salary is listed at $165,660.

    So it looks like someone’s been fibbing or Canoll got a huge raise in 2017.

    The PAST president, Donald Moak, got $1.2 million from other organizations. It doesn't say which.

    Should I even bother continuing, or can we dismiss the National Review (when quoting lobbying groups) as a credible source?
     
  17. Erik Latranyi

    Erik Latranyi Allpar Legacy

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    We should not argue this, but mainline pilots make more than $165K. I am sure the union president probably makes more than the people he is organizing......which is how most unions pay their leaders.....more than the rank and file.

    But the point is that not all CEOs are paid millions and not all union leaders are philanthropists taking a middle class wage. Some union leaders make a lot of money. So do some CEOs. Others do not.

    So, everyone should stop this "US vs THEM" nonsense.

    Boards are typically made up of family owners or large investors. These are people who earned their money.

    Executive teams (CEO, CFO, etc) are specialized employees who are paid highly for the responsibility they have to run the company.

    Most blue collar and white collar employees are not paid as highly because they do not carry the same level of responsibility for the success of the company.
     
  18. redriderbob

    redriderbob Mopar Guru!
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  19. Moparian

    Moparian Well-Known Member

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    Did anybody proof read that article before it got posted? My brain hurts from having to read that.
     
  20. Erik Latranyi

    Erik Latranyi Allpar Legacy

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