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Today in the New Gilded Age

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monopoly-guy

Above: Boeing CEO Jim McNerney

Boeing CEO Jim McNerney is retiring next year. His pension: $3.9 million per year for the next 15 years.

Jim McNerney is the same person who used the threat of capital mobility to force the International Association of Machinists-represented workers in Washington to sign a new contract that gives up their pensions and grants only a 1 percent raise every other year. He said he would move to South Carolina if they didn’t, where workers in Boeing plants only make half of what they do in Washington.

Boeing is a shockingly profitable company that could easily afford to pay pensions to workers.

Jim McNerney is also the same person who was the former Chair of The Business Roundtable, a corporate lobbying group looking to raise the retirement age to 70.

In conclusion, Jim McNerney is a terrible human being. And very emblematic of the New Gilded Age

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  • yabbut how else are you going to attract talent?

    • Ahuitzotl

      piece of cheese on a line of string

  • Brad Nailer

    Man, how do people get that way? Don’t answer that.

  • Aimai

    Have some sympathy. 3.9 million a year for 15 years is barely champagne wishes and caviar dreams kind of spondulicks.

    • Robin Leach: now there’s someone who knows how to be a suck-up.

      • blue meme

        Has there ever been a more perfectly named human than Rob’n Leech?

    • RPorrofatto

      3.9 million a year for 15 years is barely champagne wishes and caviar dreams kind of spondulicks.

      Sadly, compared to our Wall St. rentiers, some of whom “make” millions per hour, this is indeed paltry pickins. I mean, you can’t even get a decent penthouse in Manhattan for that kind of money.

      Not to worry. Since he’ll be 66 next year and he and his friends haven’t succeeded in raising the retirement age to 70 yet, he’ll get Social Security and Medicare.

  • Rob in CT

    This is the sort of person who makes it to the top. There are exceptions, but a willingness to stomp on other people is a key attribute for ladder-climbing.

    In other news: Obama seems to be trying to get more folks overtime pay.

  • Todd

    He’ll establish some private foundation to bring model airplanes and flight simulators to the inner cities and be hailed as the Johnny Appleseed of the air.

  • Bruce Vail

    I wonder whether there is any legal history of shareholders suing the board of directors for misconduct in cases like this?

    • liberalrob

      The shareholders? They ARE the Board of Directors…of other companies.

      http://www.theyrule.net/

      Search for mcnerney under “People”
      Click on “Show Boards”
      Follow the huge piles of money

  • Derelict

    In a certain sense, he was at least being honest when he forced the pension issue. How many times have we seen corporations build large pension funds for the rank-and-file employees, only to have management convert those pension funds to their own personal “performance” bonuses via bankruptcy sleight of hand? Instead of going through that kind of kabuki, he just said up front, “No, fuck you–the money is MINE!”

    • DAS

      The other trick, as I described below, is to routinely lay off employees before they become fully vested in their pensions/retirement funds.

  • Bruce Vail

    The $58.4 million over 15 years probably understates McNerny’s total pension benefits.

    As was disclosed in the lawsuit by the discarded wife of GE boss Jack Welch, these big corporations sometimes shower other benefits on their retired CEOs. In Jack’s case, he had use of company cars and airplanes. Also luxury apartments. There were memberships in pricey golf clubs. Amd more and more…

    • Aimai

      Oh yes! Jack Welch! He even got lifetime dry cleaning.What incredibly cheap bastards these guys are.

      • c u n d gulag

        Hell, they’ll keep asking until someone says “no.”

        These companies need to tell these psychopaths and sociopaths “no” every once in a while, just so that they don’t forget that that word exists in the English language.

        • Derelict

          In many cases, these CEOs are able to stack the board of directors with cronies. They all sit on each others’ boards, and they all vote for enormous CEO pay, benefit, and retirement packages for one another.

          Happily, the Supreme Court has struck down most of the laws that allow shareholders to block such deals, or to sue when things get out of hand. Obviously, is we let shareholders protect the value of their stock, we cannot possibly maximize shareholder value.

          • jim, some guy in iowa

            it makes sense to think they have the same contempt for non-crony stockholders they do for workers

            “hell, the shareholders don’t know anything about how to run a company- they’re just marks and parasites looking for free rides”– the average board member/CEO

          • So are all shareholder lawsuits blocked? Because most of the shareholder lawsuits of which I was aware, were the kind that tried to punish a company for not ‘maximizing shareholder value’ by not being greedy enough to take a few pints of plasma from each employee on top of their mandatory unpaid overtime.

          • DAS

            IOW, we are back to having interlocking directorates? Does the Clayton Act no longer exist? Yep, it’s the New Guilded Age

            • Ahuitzotl

              Interlocking directorates went away, sometime?

            • Redwood Rhiadra

              Clayton Act only applies between companies in the *same industry*. Perfectly legal and always has been for the CEO of an oil company to sit on the board of a software company, a car manufacturer, and an agricultural firm – and have their CEOs on his board…

          • Brett

            It might not even be necessary to do that in McNerney’s case. The guy is a shareholder’s wet dream: moving production away from a unionized job site, cutting costs back hard, making big buy-backs on stock.

        • so-in-so

          They know it’s there, they use it consistently when labor asks for anything…

      • muddy

        I immediately thought that he probably got a suit cleaned after one wearing just because he could. Happily my next thought was that perhaps the extra dry cleaning fumes would make him quite ill.

        • Snarki, child of Loki

          The stockholders are the ones that got taken to the cleaners, that time.

    • DAS

      When I retire, I get a retirement party at which people say good things about me and at which there will be free food. I also get whatever money I’ve been able to accumulate in my retirement plan (presumes stock market doesn’t completely tank). And if people like me enough, I get to keep office space / lab space as well as get to take classes for free as an “emeritus”.

      Of course, many people don’t even get that retirement plan. A standard trick (at least for employees of municipal “authorities” as well as for non-profits … I presume they do this in corporate America as well) is to decide it’s time to reorganize your department lay you off (as there is no place for you in the reorganized department) before you become (fully) vested in your retirement plan — i.e. the company/authority “makes contributions” to your plan, but you don’t get them because you’ve not worked at the job long enough.

      Nobody is giving me $3.9 million a year for 15 years. Heck, I don’t even get free dry cleaning.

      • Peterr

        Do you get the coveted emeritus parking pass? In some settings, that’s worth far more than free dry cleaning.

      • Lee Rudolph

        I didn’t even have to retire to get taken to the cleaners!

      • efgoldman

        My last day is tomorrow. I turned 70 yesterday. I have a decent 401k plan, fully vested, and because I work for a major financial firm, free advisory management (otherwise there’s a fee). My benes go to the end of July. No desk/lab space (even if I wanted it), no parking pass (we didn’t have them). But this is a privately-owned company. The owners are billionaires, and I suppose they get lots and lots of perks, but they are publicly (mostly) abstemious, and the patriarch is one of those New England types that wears the same Brooks Brothers suit until the cloth falls apart.
        This was one of the few companies in the business that didn’t cut matching 401k contributions in any of the recent recessions, even the big one. In fact, they’ve raised them.
        The key, of course, is “privately held.” There’s been speculation forever about what happens when the patriarch dies (he’s in his 80s and doesn’t run the company anymore). If they went public, it would be be of the largest offerings ever.

        • Malaclypse

          I’d wish you a happy birthday, but announcing your retirement means you’ll be dead of a mob hit any second now.

          I promise to yell “Mendoza!”

          • efgoldman

            announcing your retirement means you’ll be dead of a mob hit any second now.

            I’m definitely not retiring from blog commenting, especially here.

        • Linnaeus

          Congratulations on your impending retirement.

          Does that mean that when efgoldman talks, people will no longer listen?

          • efgoldman

            when efgoldman talks, people will no longer listen?

            As I said before, just an hourly drudge, fixing the customer’s mistakes.

      • Ahuitzotl

        there will be free food.

        Parasite!

    • Linnaeus

      More evidence that the richer you get, the less you actually pay for things.

      • Snarki, child of Loki

        …including “your crimes”. It’s the American way! USA! USA! *sob*

  • Peterr

    McNerney is an equal opportunity guy, willing to screw union workers AND welch on a deal with powerful DC Republican politicians all in one swift move if he thinks he’ll get an extra nickel.

    Shorter McNerney: “Nothing personal, fellas. It’s just business.”

  • c u n d gulag

    Why, he’s the very soul of Christian charity!

    He gave his workers 1/2% income increases, anally annually.

  • Steve LaBonne

    Paging Dr. Guillotin!

    • Snarki, child of Loki

      Your devotion to tradition is laudatory, but please, we have to keep up with the times. Guillotin’s contraption is old-fashioned and inefficient.

      Now, in the 21st century, we use wood chippers.

      They are especially good in the pour encourager les autres department, no?

      • so-in-so

        Particularly if we feed him in feet first.

      • Ahuitzotl

        ah the Green Alternative. Or perhaps the red one

  • NewishLawyer

    Ugh. Well this is depressing. In other news, the Atlantic reports that the rent is too high because people can’t get loans for homes and starter homes are a thing of the past:

    http://www.theatlantic.com/business/archive/2015/06/rent-is-too-expensive/396971/

    • Phil Perspective

      Haha!! Figures that The Atlantic can’t report that it’s because. in the words of Charles Pierce, the plebes have no damn money!!

      • Rob in CT

        Yeah, gotta agree with you. It’s not “they can’t get a loan” it’s “they don’t have any fucking money! ” [which also leads to not being eligible for a loan, of course]

        So many things boil down to the fact that bottom, oh, 75% of the income distribution in this country has been taking it on the chin for ~40 years.

    • Damn, I read the comments on that link.

      Someday I’ll learn my lesson. In the meantime I’ll be curled up in the corner quietly sobbing to myself.

  • NewishLawyer

    The whole situation is unsustainable but unsustainable things have a way of lasting for a really long time.

    • Morse Code for J

      The rich have been fucking the poor for as long as we could appreciate the difference between the two. All that’s happened is that the poor have recently been more emphatic about demanding a movie and a nice dinner out beforehand.

      • efgoldman

        The rich have been fucking the poor for as long as we could appreciate the difference

        True, but there used to be a much larger cohort in the middle.

        • Lee Rudolph

          Lucky Pierre?

        • rhino

          Really, that was only the case for what, a century? Even less?

  • gratuitous

    And you know what’s bestest of all? If Boeing were to decide somewhere down the line that McNerney just wasn’t worth all this, it couldn’t just unilaterally break its contract. McNerney would sue them and win, big time.

    Whereas, when Boeing decides that those lazy retirees who worked all that time for Boeing but are now just lounging around collecting their pensions, Boeing can decide all on its own that the employment contract they signed with those workers is just too darned generous, and there’s about 20 different ways they can wriggle out of their obligation, and courts will uphold Boeing’s “right” to break the contract.

    You start to understand why France was transporting these fine fellows through the city streets in tumbrels.

    • twbb

      Ehhh….I’m with you in overall spirit, but ERISA actually does a good job of protecting vested benefits; the only way to really get out of paying them is to go bankrupt.

      • efgoldman

        the only way to really get out of paying them is to go bankrupt.

        And?

        • twbb

          “And?”

          1 < 20.

          And bankruptcy is not an easy way to shed pension liability; even restructuring requires bankruptcy trustee approval, and trustee decisions can be appealed to the bankruptcy court.

          Furthermore all bankruptcy can do is cut off further funding of the retirement trust, which under IRS rules (and the IRS does police these pretty well) would have been funded up until the bankruptcy. Executives want to raid the pension trust, that's a felony.

          For pension payments up to $54,000, the PGBC will cover the full amount even if the pension trust fails.

      • rhino

        Which has been done over and over. And oddly the executive suite never suffers.

        • twbb

          The executive suite doesn’t suffer as much as it should, generally, but I wouldn’t characterize it as “never.” Bankruptcy trustees can (and do) clawback compensation, executives can (and do) take a reputational hit.

          See, e.g.:
          http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2138778&download=yes

          The really funny thing is the fact that “top hat” pension plans — which this story presumably is about — don’t receive ERISA protection so can be seized by creditors during bankruptcy.

  • Brett

    I find it hard to get worked up about this, to be honest. When the IAM was strong, they negotiated hard for good pay, pensions, and job security. Now that Boeing management is strong, they’re negotiating hard the other way. That sucks for Boeing workers, but the current ones will still get 401ks on top of their Social Security and the retirees still have their pensions. They’re also still getting what amounts to a COLA raise every year.

    Boeing’s doing pretty good right now in profitability. But if they finish a big order and don’t get any big new ones right away, etc, that’ll change quickly.

    • Linnaeus

      Now that Boeing management is strong, they’re negotiating hard the other way.

      It’s not just now. This is a classic Boeing tactic to get what it wants, not just from workers, but from government as well – they’ve done it since Bill Boeing ran the company.

      • Juicy_Joel

        Don’t forget the $8,700,000,000 in tax breaks they extorted from cash strapped Washington State in 2013.

        The genius management was also responsible for the innovative (read cheap) “snap-together” construction design of the 787 which resulted in massive delays as the prefabricated parts (made in a number of US states and foreign countries) didn’t fucking fit together once they got to the assembly floor.

        Fuck Boeing.

        • Linnaeus

          Don’t forget the $8,700,000,000 in tax breaks they extorted from cash strapped Washington State in 2013.

          Indeed, that is exactly one of the things I had in mind.

          Boeing has always played hardball.

          P.S.: I knew someone working at Boeing when the company was rushing to get the 787 completed. Yes, it was pretty much a clusterfuck.

  • urdsama

    How bad does it need to get before people start burning down shit?

    • Linnaeus

      You’ll be waiting a very long time.

  • j_kay

    Isn’t the Gilded Age anti-Christian given our Iraqi invasion and laissez-faire; for isn’t Christianity a peacemaker and commmie and caring religion? The Gilded Age seems global to me except Latin America, Turkey. and parts of Scandinavia.

    Anti-Christianity, I think, dates way back. I feel Roman Emperor Constantine corrupted alot of Christianity to anti-Christianity when he adopted it. How else would a peacemaker and commmie and caring religion do the Crusades and Roman wars of conquest? Francis is a rare and to me funnily Christian Pope.

    Liberal Mohammed was bugged enough to develop a religion, Islam, that destroyed the Roman Empire. Even though it had to wait centuries for cannon to get the last city. The Islamic Caliphate was also a first Renaissance, why our Renaissance depended on their work like algebra and a better scientific method than was available.

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