AD #2327 – Green Car Segment Not Growing, Michael Sprague Leaves Kia, Are Executives Paid Too Much?

April 6th, 2018 at 11:35am

Runtime: 7:50

0:31 Michael Sprague Leaves Kia
0:57 GM’s Chief Economist Retires
1:19 Chevy Refreshes the Malibu, Cruze and Spark
2:56 Green Car Segment Not Growing
3:44 Passenger Cars Continue to Slide
4:32 Are Executives Paid Too Much?

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26 Comments to “AD #2327 – Green Car Segment Not Growing, Michael Sprague Leaves Kia, Are Executives Paid Too Much?”

  1. Lambo2015 Says:

    Rande Somma made the most sense of anything I have ever heard on that subject. CEOs should be paid on performance to some extent and not have millions of dollars thrown at them for doing things that will short term help the bottom like (like he mentioned laying off 20% for labor reductions) only to get his bonus and then rehire so they can support the work load. Its part of the reason people dont stay with a company for 30 years like they used to. Reminds me of how Kmart was failing and paid their CEO millions of dollars as the company was falling into bankruptcy. Crazy and then they leave with a couple million exit bonus..

  2. Lambo2015 Says:

    As many have said on this site before. EVs will never take a good chunck of the market until they are comparable in price, performance, refueling time and available places to recharge. Period.

  3. Frederick Schmidt Says:

    Rande Somma has some good points. I was a store manager at Home Depot during the time Bob Nardelli became CEO. Shortly after his arrival the people at the store level had pay increases and their hours cut and replaced by more part time people. Nardelli’s only goal was to slash overhead anywhere possible without considering the consequences. His moves led to less people with experience in their departments in the stores and some hours of a day with one or none is certain departments. The result was more customers leaving or having a bad experience. Store morale dropped and ask many shoppers at the time and many would say what was going on. Nardelli left with the typical package of money and stock options. There are some CEO’s who really earn their pay but many do not. The founders of Home Depot deserved what they got and handed Nardelli a good company.

  4. XA351GT Says:

    I don’t see how having less to choose from as far as passenger car models go is going to slow down the fall in sales. In fact I would expect the opposite as buyers for the models being cancelled may either keep their current car longer or just opt for a CUV or SUV from their brand of choice. Example if a Taurus buyer can’t by one they may go up to the Explorer , doubtful they would go down a class. I expect buyers that have strong brand loyalty to do just that.

  5. Frederick Schmidt Says:

    For example is the Taurus police version going away? Will the Dodge Charger go away and the police version too? I am sure many police departments will go all SUV but in many small towns sedans are still the primary choice.

  6. Buzzerd Says:

    Executive pay- the big box retailer Target set up shop in Canada a few years ago and it turned into a total shit show. For that out standing performance the CEO Steinhafel took home a $61million hand shake when he left as Target was closing all the stores and selling off the properties.
    We need to go back to the tar and feather days at times like this.

  7. Ki Says:

    It seems that a lot of police cars are now SUV’s, I guess part of the militarization of police in the U.S. SUV’s, even mid-size ones like Explorer, have more of a “macho” look than cars, and they can carry extra people in the back with machine guns.

    I hadn’t heard about the Charger going away, but it has been around for a long time, and won’t be around forever. I suspect highway patrol police use a sizable portion of Chargers sold.

  8. JWH Says:

    Executive pay – Not sure what it is today, however, many years ago in the Japanese auto industry the CEO’s were paid about 20 times that of the lowest paid company employee. I believe current ratio at GM is about 400 which I do find somewhat excessive.

  9. Albemarle Says:

    We have a Chevy Bolt EV and love it. But it’s one of 2 cars in the family. We bought it with the understanding that we would only charge at home & the cottage. They have a role as second cars and if they were explained that way, I think a lot more people would consider them.

    I do not understand the dropping of cars in a lineup. Companies seem willing to put out a niche vehicle selling 30,000 (like the Bolt EV) yet drop an Impala that sells 70,000 units. Pretty soon the only mainstream full size car you can buy will the the ancient, but still nice Chrysler 300.

  10. Brett Cammack Says:

    As long as a corporation can be sued by stockholders for not maximizing their return (i.e. profits), you will see this dysfunctional behavior. Long term planning is tantamount to corporate malpractice under the current legal structure.

  11. GM Veteran Says:

    Who says hybrids are going away? They are actually going mainstream, and will see dramatic sales increases. Check out the new 2019 RAM 1500. Two of its three engines are hybrids. They don’t use that marketing term, but they are 48 volt hybrids. And, they make a lot of sense. Ford will launch an F-150 model with similar technology. Based on what suppliers have said about future technology orders, I think you will see most companies simply building this equipment into their vehicles as a standard part of the powertrain.

    After all, if I can still have my full size SUV, and get 30-35 mpg, why wouldn’t I want that? Especially if the cost increase is very minimal. Its a much better payback than diesel or EV, until the price of batteries comes down to a competitive level.

  12. Drew Says:

    Leaders should be proportionally compensated for their ethical leadership of their business and mankind. In fact, most of a CEO’s contribution isn’t measurable until many years later. As such, any CEO departing with a “golden parachute” is likely leaving a sinking ship and is being inappropriately rewarded for failure. All BoDs should stop that practice.

    With this foundation of values, I used to say ‘no CEO should be paid more than the POTUS.’ I said ‘I used to say’ it. The present POTUS has me rethinking his compensation.

    I’m with @8 JWH. Set a ratio, beyond which requires the union’s and/or customers’ approvals. But every business needs to follow the same rule to avoid job hopping.

  13. Malondro Says:

    With the removal of CD players I may never buy another new car.

  14. Kit Gerhart Says:

    9 I’d probably have a Bolt as one of my cars, if I had a way to charge it at my condo. The range would be adequate for most of my driving, and the car drives quite well.

  15. Kevin Anderson Says:

    I don’t have a problem paying a CEO for performance, but only when it is a direct result of some decision they made. It appears most OEM performance results from changes in the macro economy, or clever engineering or styling that the CEO had nothing to do with.

  16. Lambo2015 Says:

    The real problem with the CEO pay is many of them are on the boards of other companies and they all make sure the scratch my back and I’ll scratch yours is reciprocated.

  17. Kit Gerhart Says:

    People talk about athletes being overpaid, but compared to many CEO’s, they are not. There were probably many thousands of people who would have been better CEO’s at GM than Roger Smith, but not many people who would play basketball as well as Michael Jordan at his peak.

  18. Len Simpson Says:

    My driving days are about over , but having spent my working lifetime in auto repair , I pick this as the best design option of all EV’s can’t beat the KISS principle

  19. Randy Says:

    Green car segment not growing? A few years ago I owned a V8 Dodge truck and now we own two BEV cars. They are funner to drive and now I don’t get hammered with the onerous gas taxes. Wake up each day with a full tank. Not only that but if you were to ask me two years ago if I would buy a car from “Government Motors” I would call you crazy. Now we own two from GM. This is what car makers want…new loyal customers to the brand. I recently went from a BMW to a Chevy. We will never own another ICE car as our daily car. Try the silent Torque O Rama and you will be hooked.

  20. Bob Wilson Says:

    Hybrids had a 12-14 year head start over plug-in hybrids and only now are we seeing practical EVs. Small wonder that many hybrid owners (including me) replaced our hybrids with plug-in hybrids that have half the cost per mile in EV over gas miles. But let’s see some sales numbers from March 2018:

    28518 (44.0%) – Total Hybrids
    14480 (22.4%) – Total BEV
    10882 (16.8%) – Total PHEV
    10688 (16.5%) – Total Light Duty Diesels
    204 (00.3%) – Total Fuel Cell
    64772 (100%) – Total “green” cars, 3.9% of total

  21. Bill Nelson Says:

    IMHO CEO pay should be limited somewhere around 40-50 times what the bottom tier of employees make. If the CEO wants a raise, he/she would have to raise the pay for the folks at the bottom of the food chain, too.

  22. Kit Gerhart Says:

    19 The PHEV number would be higher, if Prius Primes were sold everywhere. I would have bought one, instead of a regular Prius a year ago, if they were sold in my area. Yeah, I could have gone somewhere else to buy a car, but didn’t want to mess with it.

    I don’t currently have a place to charge a car at my condo, but that is likely to change during the time I have the car, and the Prime seems to have no compromises relative to a regular Prius, even if you never plug it in.

  23. Frederick Schmidt Says:

    Looks like Business Insider agrees with my opinion of Bob Nardelli.

  24. Kit Gerhart Says:

    My vote for worst CEO ever would be Roger Smith, who oversaw GM’s losing 11 percentage points of market share in about 9 years.

  25. Todd Turner Says:

    Sprague leaving Kia, is a shock, but it explains his less than usual enthusiasm when I saw him at the NY show. Interesting.

    Exec compensation has completely run amok in our culture. How can any board justify paying Jeff Smisek, the former CEO of United Airlines who was responsible for creating the corporate culture that allowed such disdain for customers it’s been the media darling for all the wrong reasons. On top of that, he was forced to leave when he became the target of a corruption investigation. And the board’s punishment? A paycheck for $37 million! Complete insanity.

    Let’s not forget where Bob Nardelli went AFTER he screwed up Home Depot: Chrysler

  26. Ukendoit Says:

    #13, Hey Malondro, I heard the new 2019 RAM trucks offer a CD player as a nostalgic nod.