What strings should be attached to any finance company or automaker bailout money?
if it was up to you.......
- call me AlLv 71 decade agoFavorite Answer
Suppose you were to apply for a loan from a bank. You'd be expected to answer questions like "What will you do with the money?" and "How can I be sure I will be repaid?" If it's for your struggling business, you'd better be ready for "What are you doing now that will turn your business around?"
If it were me, I'd make them answer questions along these lines (much more detailed, of course).
I am stunned none of the banks nor automakers have offered answers to these basic questions.
The financial crisis resulted in credit being too tight and companies couldn't get routine loans or lines of credit. That's what the bailout $ should be used for. Lend out the whole sum to loosen up the credit markets.
They need to make better cars and designed for $4/gallon gas. That means re-engineering, re-tooling, and an overhaul of their manufacturing processes. That will take years (I used to work for an auto supplier), but at least you can specify an end result.
No bonuses, no excessive salaries, no dividends, no buying other companies without gov't approval, no expenditures above a certain amount (say $1M), no negotiations on these terms, and no kidding. Also, if they default, the execs are personally on the hook. What I'd want is terms that would be acceptable only if management were fully committed to fixing their companies. That would prevent others from asking.
- 1 decade ago
I'm not sure that we should give them any bailout money. I think we should tell the executives who created this mess that they are going to fix it with their own resources or we will seize enough of their collective assets to do so and place a lein against any of their future earnings if their assets are insufficient to fix the problem. There will be mandatory jail time as well for failure to solve the problem. This isn't about them not having the resources to fix the problem. It is about entitlement. They feel that their guile is enough reason for them to be allowed to keep anything they can get with it. We need to change that mentality. We need to make them afraid to cheat people instead of afraid to NOT cheat people.
So to answer your question, the strings should be floating them no higher than break even at the end of the year, nothing or next to nothing for the people who made the bad decisions, and possibly jail time and seizure of personal assets of the executives to cover losses and punish indiscretions.
Think of it this way: a person robs you on the street and gets maybe $100 from you if you were on the way to or from the bank. That is a crime worthy of jail time. A group of Wall Street conspirators defraud you and everyone else in the country out of an average of $2333 and they might just get fired or they may even get to keep the money with no jail time! I think the attorneys that find the loopholes in the law that these executives use to bend the laws should go to jail and be liable for damages as well. Their job is to be an officer of the court and therefore accountable to the highest ethical standards. They should also be disbarred for helping break the laws since technically they are supposed to advise you on how to follow the rules, not get around them like so many private lawyers do.Source(s): No matter how old, experienced or successful the individual, childish behavior is still childish behavior and often has to be dealt with in the same way.
- LeAnneLv 71 decade ago
This is a double edged sword - on the one hand, a bail out must address the basic problems that led up to this crisis, however, we do not want the government essentially controlling the means of production in this country. That's socialism at best and communism at worst.
A good start might be to seriously consider if the executives who earn in excess of 500 times the compensation paid to the workers are worth that kind of money (an average of $42 million dollars annually) - especially considering that they have succeeded essentially in driving these companies into bankruptcy while consistently siting the costs of their assembly labor as an excuse. That's like the fox blaming the chickens for their own demise.
- Anonymous1 decade ago
There would have to ba a fundamental change in the way they do business.
Corporate greed is ruining the country.
LeAnne nailed it.
The bailouts might be a temporary fix, but there has to be accountability& full disclosure their oprating budgets.
Belts have to be tightened esp at the top, during & after the bailout refloats the boat.
No golden parachutes , lifetime perks, no obscene bonuses.
Salary freezes if necessary for the duration.
Half a loaf is better than none at least for a while.
Has to be a change in corporate culture & it has to be voluntary ,otherwise it becomes government interference.
Government needs to change as well.
Both are equally guilty.
Public pressure for change has to be the driving force.
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- Anonymous1 decade ago
suspend any dividends, no bonuses for CEO's or any other employee's and complete transparency.