Posted by Much can be said from Gordon Gekko’s signature line in the 1987 film Wall Street, “Greed, for lack of a better word, is good.” But it all depends on who’s saying it.
Wall Street these days has a tough road ahead. Bank bailouts, executive compensation and corporate greed all have helped shape Wall Street’s negative perception. Moreover, most Americans believe Wall Street has done much better for itself in this down economy than Main Street.
Take GM’s restructuring for instance. Only 54% of bond holders of $27B in unsecured bonds are willing to accept a 10% equity stake offer (with warrants for another 15%) from the U.S. Treasury. Keep in mind that two-thirds majority of the dollar amount and 50% of holders are required for approval. Are some bond holders being too greedy or just want their fair share?
No one wants to lose money. Factional infighting among bond holders continues to perpetuate the Wall Street stereotype of money and greed. The fact is there may be no other alternatives given GM’s dire financial condition. The message right now among bond holders needs to be unified and until that happens, the wheels will continue to spin.
Labor on the other hand may offer a different story to tell. It’s hard to disagree with the fact that UAW president Ron Gettelfinger handled GM contract negotiations flawlessly. Aside from suspending dental coverage and reductions in prescription drug coverage, the Detroit-based union pretty much went unscathed giving up cost-of-living raises and performance bonuses.
Some winced when Gettelfinger used words like “drastic, necessary and painful” to describe the deal he secured for his union, especially when hundreds of thousands of people are losing their jobs. Others found it difficult to fault a person for doing a good job. Was the union being too greedy?
Perception can play a major part in any initiative or campaign although it may not directly affect the outcome. Many battles have been won and lost in the court of public opinion. Even though both parties are vying for the best deal, perception may still not be the reality.