Help us all if this is really Ford’s (F) Congress-assigned survival plan: The Wall Street Journal says the company will announce… drumroll… a plan to make smaller cars and to cut CEO Alan Mulally’s pay.
Neither of these things sounds particularly significant. CEO pay is a cosmetic issue, and if the company could have realistically retooled to focus on fuel efficiency (an issue that’s lost its economic significance with the fall in oil prices) they would have done so already.
BUT: This is actually really smart, since Ford has come up with the most soundbite-friendly recovery plan possible. Think about it. The exercise was not actually to come up with a true turnaround plan (impossible to do in a matter of weeks) but to come up with a plan that made it easy for politicians to vote for a bailout. They needed to give Congress cover. Voila: Green cars and CEO paycuts.
We still don’t know what GM (GM) and Chrysler are going to offer — expect this to leak in the next few hours — but if they’re smart, their proposals will be something along the Ford model. Ironically, if this works, Ford CEO Alan Mulally would deserve every last penny of the bloated salary he won’t be receiving.
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