Burns & Richter Shameful People

[Admin]

Source: Toledo Blade
Article published Tuesday, March 7, 2006

Top executives to get incentive bonuses
Payments to equal 80-120% of salaries, SEC filing reveals

By JULIE M. McKINNON
BLADE BUSINESS WRITER

Dana Corp. leader Mike Burns will get a cash bonus of up to double his base salary -which was $825,000 at last count - if he meets certain undisclosed financial performance goals set by the board this year, the company revealed yesterday.

Three days before it filed for Chapter 11 in U.S. Bankruptcy Court in New York, the Toledo company's board approved an incentive plan for Mr. Burns and at least three other company executive officers, according to a Dana filing with the U.S. Securities and Exchange Commission.

The other three executives will get cash bonuses of 80 percent to 120 percent of their salaries if they meet performance goals, the filing said.

A company spokesman declined to disclose yesterday who the other executives are.

Bob Richter, Dana's chief financial officer whose departure was disclosed Sunday, left the firm last Wednesday, two days before the auto supplier filed for bankruptcy and the same day it failed to make $21 million in interest payments on bonds.

He will receive at least $35,000 a month for consulting services for a year, an amount that will increase if he puts in more than 100 hours a month, a company SEC filing said.

Meanwhile, in bankruptcy court yesterday, the troubled company received approval to pay taxes and for moves to keep its business going.

Judge Burton Lifland allowed Dana to pay its utility bills, fill orders from automakers, and continue worker compensation programs.

Ted Stenger, a managing director at Michigan turnaround firm AlixPartners LLC, was named by the court to be Dana's chief restructuring officer.

He is to report directly to Mr. Burns and to communicate with creditors and help senior management develop a reorganization plan, Mr. Burns said in a statement.

"Ted brings to Dana more than 20 years of experience assisting major corporations in addressing significant financial and operational challenges," he said.

The local firm received court permission yesterday to hire New York restructuring firm Miller Buckfire & Co., as well as law firm Jones Day, and to use its regular law firm, Hunton & Williams LLP, as special counsel.

After failing to get enough credit to cover mounting bills, Dana filed for Chapter 11 bankruptcy protection Friday, listing assets of $7.9 billion and debts of $6.8 billion.

The U.S. Trustee for the bankruptcy court has scheduled a meeting of creditors for Friday in New York to organize a committee to represent the interests of unsecured creditors.

[wsulteen]

It seems Mr Burns thinks he can do no wrong, In the interview from the Toledo Blade he didn't have a problem with the pay raise, and all the company"s problems happened before he came so he has no problem spending all the shareholders money and starting over with a clean slate.

[Sal]

You are correct wsulteen.

Burns has been there for some time and the downfall happen while he was at the helm.

An example of a real leader that had nothing to do with corporate mismanagement is Lee Iacocca.

Chrysler’s problems began before Lee Iacocca took charge but Mr. Iacocca took no pay.  Lee Iacocca is a man of great integrity.  

Burns is, shall we say, something else.  

[Sal]

Just to put things in perspective,

In 2004, Bob Richter, Dana’s chief financial officer received a $692,223 salary or $57,685 per month.  Now if you assume that he actually worked a 40-hour week.  He made around $343.36 per hour.

Not bad pay for the CFO of a company that is heading for bankruptcy and that had financial records that were so bad that they had to be restated.

Wait, it gets better!

Bob Richter retires two days before the company goes bankrupt then he is hired back as a consultant.

As a consultant, he gets paid $35,000 a month for working less than 100 hours per month.  If he works more than 100 hours, he is paid more.

Now lets think about that.  He could work less than 100 hours and get the full 35K but we will be nice stockholders and assume that he puts in an honest 100 hours worth of work each month.  
That works out to $350.00 per hour.

So now, he is paid at around the same hourly rate without having to work the hours and that does not include cash bonuses or other incentives.

Of course Mike Burns is king.  Burns received $825,000 in salary and $5.5 million in bonuses and other compensation in 2004.

These people knew that they would benefit by bankrupting the company and that is why the company is in Chapter 11 bankruptcy.  In a chapter 11 bankruptcy they can get away with stealing the shares from the stockholders by canceling them, the same as Kmart did.  They simply issue new shares to themselves and get super rich.  

We have very bad people controlling Dana and those people must be removed.

[bumpkob]

Burns has set himself up for a 200% bonus,the measly 80% and 120% bonus is for his underlings. Also of interest, when asked about the $5.5 mil PERFORMANCE bonus paid on 2005 results, (which as we all know still have not been reported), he said ..." the BOD has determined that no further action is necessary...".  In other words, "I've got it and I'm keeping it, end of story".  All we can hope for is that this is a true reorganization and Dana can return to doing business the way we used to when the PEOPLE were the most important asset! .. p.s. the Q&A..on his bonus was on last Thursday's live webcast.

[sunnfuun]

JMO guys but:

 It's irritating to think these guys are getting bonuses like that to do a job they're already getting paid to do!  It's truely corporate greed at its finest.  Evidently they have no conscience about all those people who have lost not only their investment savings, but their "retirement savings" as well in this stock!  Not everyone held onto this stock for investment purposes.  For many Dana retirees it was their retirement savings invested MANY years ago.  And what do they do now, especially if they don't have family to help them out?  Do you think the Execs think about that at night when they lay their head down?

I mentioned on the other message board before, these guys should take a lesson from the US Air CEO.  He gave up his yearly bonus of $770,000 the other day because he said he would not take it while there where employees that were expected to accept layoffs and paycuts.  Now that's a CEO who truely has his company's best interests at heart.

[Violated]

[Admin]

[alldude01]

Back in October are hero Mr. Burns, put out a internal company directive that all saleries for all management staff were frozen and that all 2005 performance bonus would not be paid.  It also stated that this would be for a period of one year.  I can tell you that the moral went totally in the dumps when the anouncement went up that he and the other top exec's got their's.  What the hell is the board doing? Awarding people for non-performance!

[theinsider06]

[Axle Man]

In my almost 4 decades with Dana - I was taught to work under the following underling philosophy:

You have two choices concerning your boss:
1)  Make him/her look so good they get promoted within your group.
2)  Make him/her look so bad that they get promoted outside your division.  

[JerryJ]

This Article was published October 12, 2005.  According to this article, experts and DANA felt that bankruptcy was not in the picture and that Dana will recover nicely.  Huh!  Another BIG example of the deception of the BOD and management!



Takeover doubted for car-parts firm
Local company solid, experts say
By HOMER BRICKEY
BLADE SENIOR BUSINESS WRITER


Automotive stock analysts and other industry experts said that the plunge in the price of Dana Corp. shares in recent days makes Toledo's largest company a possible, but unlikely, takeover target.

Those experts also said it is unlikely that the local firm will follow Delphi Corp., another big auto-parts maker, into bankruptcy court as a way to get rid of high labor and benefit costs.Such prospects became possible this week as Dana said it would restate 1 1/2 years of financial reports because of accounting problems, causing the firm's stock to plummet.

The stock closed at $5.71 a share yesterday, down 33 cents, after Monday's $3.15 drop. The price, the lowest in decades, makes it relatively inexpensive for a takeover company to solicit a controlling interest from Dana shareholders.

The company's profit decline in recent quarters and higher expenses and debt spur questions about a bankruptcy filing.

Still, industry observers said Dana is not Delphi and there's no reason to panic.

"Dana is a very good company," said Dennis Virag, founder and president of the Automotive Consulting Group Inc. in Ann Arbor.

"Comparing Dana to Delphi is like comparing apples and oranges. Delphi has a lot of systemic problems well beyond anything I anticipate with Dana," he said.

Mr. Virag, who lives in Sylvania Township, said he doubts that bankruptcy or a takeover would happen, but added that a number of private-equity firms such as Blackstone Group and Cypress Group have shown willingness to buy automotive operations.

"This is not a good scenario," said Kevin Tynan, senior automotive analyst for Argus Research Co. in New York, of Dana's restatement and plunging stock price.

He doesn't foresee bankruptcy either, but acknowledged that a takeover is possible. He and others questioned, however, who would want to buy a company in the troubled auto parts industry.

"There's so much uncertainty in the supplier industry," Mr. Tynan said. "Everyone is so beaten up."

Dana, a Fortune 500 firm with $9.1 billion in revenues last year and 46,000 employees worldwide, said this week that weaknesses in its internal controls will result in restating its earnings for 2004 and the first half of 2005. How much the profit picture will change and when the new figures will be released is uncertain. "From a Dana standpoint, bankruptcy is not an issue," company spokesman Todd Romain said.
But he declined to comment on the possibility of a takeover bid, such as Dana had from ArvinMeritor Inc., of Troy, Mich., in 2003. That unsolicited takeover attempt occurred when Dana's stock fell to just over $6 a share. Ultimately, Dana fended off the unwanted suitor.

Since then, the stock price has climbed substantially as the Toledo maker of axles and truck parts cut jobs, sold off some business units, and made other moves. Dana even restored some of its dividend it had trimmed to a penny a share.

The result was the stock hit a high of $23.20 last year, though that was still far below its modern high of $61.50 in 1998.

"From 1998 to the present, it has been a very ugly downhill run," Mr. Tynan said.

The Delphi bankruptcy, he said, means that anything is possible. Delphi, a spinoff from General Motors Corp., is the nation's largest independent auto parts supplier, but is saddled with high labor and benefit costs. It filed for Chapter 11 protection Saturday and has said it wants to cut wages by more than half.

Analysts said that Dana is in a better position than Delphi, with more modern facilities and lower wage and benefit costs.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said he doubted that Dana would lose its independence, but "you never know."

The auto industry, he explained, is in a painful period but it will survive.

"It will just be restructured to make it competitive," he added.

Dana said this week it is considering another round of restructuring to trim costs and fix problems.

Contact Homer Brickey at:
homerbrickey@theblade.com
or 419-724-6129.

[sjdana]

In the 10K filed yesterday, it becomes clear that just three days before filing the bankruptcy petition that Mr. Richter was able to retire from the company, request his full pension (CashPlus, Excess Benefits, and Supplemental portions), and leave with a very nice consulting arrangement, but others who had formally requested retirement and "lump-sum" payouts from these funds were delayed, stalled, and finally, like James Laisure in the filing, disappointed.  He, along with many others not mentioned in the 10-K are now unsecured creditors, and will have to, "get in line" to receive even a partial payment.  Mr. Cole got out, but just barely, and he retured months before the filing of the petition!  He's still owed a partial payment, as the 10-K states.
Some of the people filing for retirement more than six weeks before Richter were routinely told that the process would take, "three to six weeks," to complete, yet Mr. Richter, knowing that Bankruptcy looming, was able to get his check in just days.  Lucky for him, eh?

One more example of the ineptitude and favoritism of the Human Resources group led by Mr. Spriggle.

The Court should revoke this unethical, unfair payment to Richter, or allow equal treatment to all who filed pre-petition.