Congress is taking a hard look at Detroit’s autos these days. But what about Detroit’s jets?
When the chief executives of Ford and General Motors flew in to Washington yesterday to ask Congress for a $25 billion lifeline, they didn’t fly coach.
General Motors CEO Rick Wagoner arrived on his company’s cushy Gulfstream IV, ABC News reported. Ford CEO Alan Mulally flew in on a private company jet as well.
It costs about $20,000 to fly one of these jets round trip from Detroit to Chicago — far more than the $900 cost of a first-class ticket on Northwest Airlines, ABC said.
Wagoner told ABC he took the private jet because he’s a busy guy. Mulally declined to comment.
It’s not exactly news that corporate fat cats prefer to fly in style. And assuming all eight seats on the G4 were taken, the private jet only cost about $13,000 more than flying commercial.
But it might not be the best move by Big Auto as it tries to convince Congress that a $25 billion bailout would be money well spent. The two have already been criticized for their generous pay packages ($22 million for Mulally in 2007, $15.7 million for Wagoner).
What do you think? Is this a tempest in a teapot, or further evidence of Detroit’s poor business practices?
For more Reuters political news, click here.
Photo: REUTERS/Kevin Lamarque (Auto industry leaders testify in Senate on Nov. 18)
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As the bailout money is continuing to pour into companies like Citigroup, a big news story has been about their use of private jets. President Obama has ordered Citigroup to cancel their 50 million dollar jet that was soon to be delivered. James Peragine at Privateaircharterjets.comhas said that private charter is actually up in the wake of the current economy and he attributes is to many aircraft owners making the switch to Private Charter instead as the sell of their aircraft.
- Posted by JimOf course the Big Three CEOs have to fly in private jets. It’s a matter of personal security. Imagine if they flew with the public - there would be hundreds of fellow travelers who would try to LYNCH them!
- Posted by Josh GTEMPEST IN A TEAPOT. All big companies — and countries — fly their execs around. It is much more time- and cost-efficient than flying commercial. If we constrained the CEOs to commercial airlines, they businesses would suffer in global competition. People, please grow up.
- Posted by Don in CABUSINESS 101 - This executive arrogance, and corporate demise, is actually only possible due to the BOARD of DIRECTORS, who are the REAL culprits. In a corporation like GM or Lehman the shareholders OWN the company. They paid good, hard cash to buy an ownership share of a corporation. The Board of Directors are SUPPOSED to represent shareholder interests, develop corporate strategy and direct the Executive who implement their directive. This is why the Board MUST be approved by the shareholders. What is actually happening is that the Executive are nominating a slate of collaborating Directors, which the shareholders trustingly approve, but then the Directors give the Executive everything they want - airplane, extravagant pay, undeserved bonuses, and more. In EVERY case, in both the financial industry and the automotive industry, the DIRECTORS SHOULD BE PERSONALLY SUED and MADE LIABLE for BREACHING THEIR FIDUCIARY RESPONSIBILITY to the SHAREHOLDERS. Had they been doing their job of protecting the shareholders investment and corporate value, by firing grossly incompetent executive, the situation would not be so dire. The BOARD of DIRECTORS should be in the news more than the executives, and shareholders should initiate a class action claim against them personally. Thats the ONLY way pandemic corporate mis-governance will stop.
- Posted by turistawhat you fail to realize is that this isnt in any aspect about these dumb over the top cocky arrogant CEO’s its about you and me. about us hard working americans that are working our butts off but still cant afford a home. the problem is to big now to just let capitalism take its course and destroy these companies because when these companies fall where will we go to work??? the way i see it in the real world we have no choice but to rescue every single large organization that gets into trouble because it is the governments job to keep america strong and the millions of people in the auto industry help keep this country strong oh and dont forget they pay taxex too at least those taxes can do is save their jobs
- Posted by QuincyWhat happened to capitalism? The principle is that weakness loses and strength sustains. If the companies fail those that replace them will be stronger and better suited to the needs of the market.
- Posted by jason