Narcissism, nepotism and greed at American Axle

[Gm_Tooler]

Narcissism, nepotism and greed at American Axle

If you need another reason why Detroit is in trouble, take a look at **** Dauch's American Axle.

By Alex Taylor III, senior editor
Last Updated: July 2, 2008: 3:42 PM EDT

NEW YORK (Fortune) -- More than two decades ago, Fortune wrote admiringly about Chrysler's **** Dauch, the muscle-bound manufacturing boss who was pounding his factories into industry-leading shape. His bruising leadership style seemed perfectly suited to a company filled with similarly high-profile executives bearing names like Iacocca and Lutz.

Since then Dauch (pronounced dowck) has gone on to lead the revival of what is now one of Detroit's leading parts suppliers. In 1994, he took over some broken-down General Motors plants that made axles and drivelines for SUVs and pickup trucks, and armed with some lucrative GM contracts, turned American Axle and Manufacturing (AXL) into a robust going concern with revenue of $3 billion.

Unfortunately, success brought out Dauch's less appealing side, and he began treating the company like a personal fiefdom and reaping industry-leading pay packages. Matters may have reached a tipping point late last week when the company announced that Dauch's board of directors had awarded him an $8.5 million bonus for 2007 even though American Axle's stock has slid from $31 to $8 over the past 12 months.

Dauch got the award in part for his "leadership role" in taking American Axle through a nasty three-month strike with the United Auto Workers to make the company cost-competitive. In the process, wages for many workers were slashed by $10 an hour. The Axle board apparently ignored the fact that the strike cost General Motors (GM, Fortune 500), American Axle's biggest customer, $1.8 billion pre-tax, in part because Dauch couldn't get it settled quickly enough. Or that GM kicked in $215 million to sweeten the kitty in order to get the contract settled.

The bonus pushed Dauch's 2007 compensation to $18, 675,194. That's chickenfeed for a hedge fund manager or investment banker, but huge money in a town whose number one industry is struggling to survive. GM's Rick Wagoner, who managed to pull off his own historic agreement with the UAW last year without incurring a three-month strike, received total compensation of $15.7 million last year and got no bonus.

An American Axle spokesperson declined to comment for this column.

But then Dauch has been treating American Axle as his personal playground for years. An industry trade magazine referred to publicly-owned American Axle as a "family company." No wonder:

-- Dauch recently named one of his sons, David, president and chief operating officer of the company.

-- Another son, Richard, worked for the company for 13 years and served as executive vice president of worldwide manufacturing before departing earlier this year.

-- The address of the company's world headquarters is One Dauch Drive.

American Axle's "executive compensation objectives" seem skewed toward providing outsize payouts to Dauch and other executives whether the company is doing well or not. In addition to the usual boilerplate about "rewarding company and individual performance," the proxy statement goes on to say that executive pay should be high even when the company is doing poorly. "In periods of temporary downturns" it reads, "our compensation programs should continue to ensure that...executives remain motivated and committed." Or else, what? They'd become shiftless and unfocused?

Dauch gets an even sweeter deal. His contract calls for him to be compensated as co-founder of the company, in addition to being chairman and CEO. As such, he gets paid "in consideration of...his experience in the automotive industry and his extraordinary value of leadership...since he co-founded the company in 1994." Nice work, if you can get it. It turns compensation into an annuity and makes current performance almost irrelevant.

A little more here:

http://money.cnn.com/2008/07/02/news...tune/index.htm

[Gm_Tooler]

A bit of irony in the fact the Dauch's first name was replaced with these **** in the post.....lol.

[Aprime]

D*ck amirite?

[big swede]

And people wonder why the UAW workers never believe the company when they say they are hurting and they need cooperation from everyone. They see this kind of garbage over and over again and again usually right after they have taken a hit.

[sigma]

And when people wondered why the UAW was going on strike against American Axle, whining about how unjustifiable it was, I ask you now, was the strike so ridiculous now that you've read this article?

**** Dauch is a major league $%^&tard who cares about nothing other than his own pocket book by refusing to compromise with the UAW, refusing to share the sacrifice required to keep the company going, and forcing GM to come and bail his ass so they could restart their assembly lines.

GM should have made Dauch's removal from the company a condition of any such bailout of the parts maker (which is essentially what they did to end the strike).

[plane]

Come on now.
I read these threads for the pronounced anti-UAW bias.
Somebody please step up to the plate.
Thanks.

[J Man]

I like how all these big wigs make 15+ million per year and the average UAW worker will be lucky to make 1 million in his 30 year career.

[steverino]

American proverb: "He who founded the company makes the rules"


See also, Mario Gabelli (founder of Gabelli mutual funds)

[sigma]

Originally Posted by steverino

American proverb: "He who founded the company makes the rules"


See also, Mario Gabelli (founder of Gabelli mutual funds)

He didn't found the company. It's the old Axle and parts assembly from General Motors. He founded it as much as the first CEO of Delphi founded Delphi.

[NfamousZ24]

Originally Posted by steverino

American proverb: "He who founded the company makes the rules"


See also, Mario Gabelli (founder of Gabelli mutual funds)

Then GM should take the company back and Fire his dumb arogant ass. Take the Axle division and what the company needs to keep reinstall them into the assembly plants as non core.

Then again they spun them off in '94

[Tornado346]

That is an impressive compensation package right there..I'm guessing he didn't think once about the cost of overhead (him) that could be reduced to either pay workers more or help GM out with costs.

The UAW lost big time on this one in 2 areas. First, they failed in keeping their dues-paying members' wages artificially high. Second, they put no pressure on the company to cut expenses like 18 million to this arrogant puke in charge.

I'm sure GM going to Mexico to get the axles during this strike had a hand in forcing the UAW to cave.

The notion that American Axle or the UAW can demand high wages at the cost of making the company less competetive is bleeding the US automakers dry. They will keep sucking and sucking the blood like a massive leach until the host is dead...and then what? Decry the government for letting the automakers go under?