Monday, November 17, 2008

rewarding bad performance

I have this on my mind today -- how did we get to the point where we reward bad performance? What got me thinking in this direction? Two things - AIG is going to award 500 million dollars in deferred bonuses and compensation to its executives, and our government may have to bailout the big 3 automakers. AIG says the money it's doling out is to keep talented executives on board to bail out the company. It also says the money is not the same money that the government just bailed them out with, but a separate pool of funds. If they had 500 million dollars lying around, why did we have to bail them out? And the executives in question helped screw up the company, so are they really such quality folks that AIG needs to reward them to keep them on board? Bascially they are heaping rewards on folks that screwed up, and screwed up royally.

As to the automakers, I see that we have no choice but to help them out. The US economy is hugely dependent on the businesses downstream and upstream of the auto makers that rely on them being in business, and too many jobs are on the line. I get it. I just don't like it. They have sat on their hands, built cars we didn't want, that didn't meet our needs, often with terrible quality thrown into the mix. And we responded by taking our business to foreign auto makers. And they still didn't respond with better cars, more fuel-efficient cars, more desirable cars. And now they will get bailed out for being bad at business.

I recently did some car shopping on line. I couldn't find a single american auto that met my requirements. Not one. And I wanted to. Not only didn't I find anything, but the deals aren't there either. Toyota is offering 0% financing, on cars that get great gas mileage and have superior ratings. GM is offering employee discounts, high finance rates, and cars with fairly mediocre ratings and so so gas mileage. I'd like to help out the team by buying American, but I can't afford to do it. I just can't take the repair bills, the higher monthly payments and the higher gas bills. So, while our government, and corporate management can afford to reward poor performance, I can't. I have to reward my purchase dollars to the companies that do the best job.

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