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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While the CEO’s made a mistake in the jets, it is rather ironic that the Senators and Congress people would complain. It was just two years ago that Nancy Pelosi thru a public fit that the plane the government gave her as the Speaker of the House was only a Gulfstream sized plan. She demanded and go a Boeing 757!
- Posted by ARFWhen those “Financial Masters of the Universe” pull their head out of their bum, cut their operating costs (ie salaries) from the top all the way down, and develope a business plan that actually shows them running at a profit….then give them some help. But not until then.
- Posted by kozettesloan where do you work? and where did you get your information at.
- Posted by bobRick had to buy back my brand new Cadillac because it was a lemon. He could have driven that car to D.C., however, there’s a chance he wouldn’t have made it beyond Toledo before the Check Engine light came on…
- Posted by Kevin RileyHow about paying the CIOs’ and top managements’ a modest salary just like the worker-bees and any other remuneration / benefits handed out five years after their retirement from that job (just like social security after retirement). Hopefully, then we won’t have schmucks like these.
- Posted by LarryThe use of the jets is more an indication of their “tone deafness”, and would be a subtle reinforcement of the judgment that this “tone deafness” was part of their charmed, narrow inner circle view of infallibility vis a vis market share, energy conservation policy, etc. So, its not the actual flying on the jets, but the evidence thus provided of their chronic failure to operate from wider perspectives. That’s called, I think, lack of OBJECTIVITY.
- Posted by Albert KraussI thought it could be only in Brooklyn. Over there, it’s something proverbial: A Mercedes stops (double-parks) at a food store, a lady in mink and Prada heels steps out, buys some high end products (caviar?) and pays with food stamps. But arriving at the welfare office (what else is Congress these days if not a huge welfare doling out unearned and most of the time undeserved handouts?), benefit application in hand, by private jet? Looks like human audacity has no limits…
- Posted by Anonymousthis is noting just wait till you see what other surprises awaits you
- Posted by jessAfter being Sold a Bill Of Goods Over the 700 Billion Dollar Bail Out Of Wall Street. It is Simply Absurd To Even Question Helping The American Auto Industry.
- Posted by Joe VlasekNothing Has Changed, Financial Markets are if anything even more restrictive now than before…The Lobyists are circling like the Vultures They Are. And All Our Politicical Leaders have to talk about IS A PRIVATE JET! Did any Body Ask A.I.G Or Goldman To Sell Their PRIVATE JETS.
WALL STREET NOT MAIN STREET…AND YES…JUST MORE OF THE SAME!
Apparently Mr. Frugal himself, Warren Buffet, agonized for years before he bought his private jet. His name for it is “Indefensible”. He finally gave in when his fame and recognizability made it really difficult to use commercial flights.
- Posted by be_toughThese guys are not as recognizable but still. . . They are all from Detroit. It would have been good PR if they had at least made a token effort and shared one private jet rather than each using his own!
These fat cats are so out of touch. The gap between executive and worker pay is obscene and the perks just rub everyone’s noses in it.
When millions are losing their jobs, there should be no taxpayer help for anyone unless they demonstrate serious belt-tightening of their own!!
@woland:
“And if shareholders agreed to hire them for that much, then they must be worth the buck.”
Obviously they’re not worth the buck if they are on the hill asking for money. If they were worth the buck, they would be running a business the way a business is run at a lower level. Yes, that means getting rid of the corporate jets. Yes, that means making concessions.
When times are hard, it’s difficult to ask for something without giving anything up. The amount of jobs that would be lost if any of the Big Three were to go the way of the dodo should not be justifiable. The fact is the CEO’s, the shareholders, and the line workers making $140,000 are to blame. The fat needs to be cut before any consideration is made to bail them out.
- Posted by JohNo more free money or bailouts. The auto industry has been mismanaged for many years. Let them go bankrupt and work to reestablish good management and products I am retired and disabled and manage to pay my bills, repay loans and live a modest life. No one has offered to forgive my debts.
- Posted by r. murphyDouble their executive salaries – but let them pay tax on it and let them pay for all their expenses – the trips, jets, lunches, cars etc. just like the man in the street, and see how their behaviour changes. The scheme should be good for politicians as well. We will have way lower taxes!
I suggest we call it “the new deal”
- Posted by GerhardPrivate jets? 22 million dollar salaries for CEO’s that can’t even manage a company? This is the same story with every business in the US (Banks included).And we wonder why our country is in such a mess. Tell you what, give them a $100,000 salary (Which I would love to have) and a percentage of the profit that the company makes (If they do) for their salary. I guarantee that they will all of a sudden start making profits. Everyone working in the US should have accountability for their work!
- Posted by MarkFirst off, I say give them the bailout— but let it be made clear that if we as taxpayers have to sacrifice OUR money to bail THEM out, they are going to have to sacrifice too.
First: lower pay for CEO’s. Who really needs to make that much money? and clearly, they are not worth what they’re getting paid since they couldn’t handle their business and now they are begging for more.
Second: Give up the private jets. I sincerely doubt that you have that many spur-of-the-moment meetings taht you can’t plan a flight a day ahead of time.
Third: Let it be clear that it is a LOAN from the American taxpayers, and we expect it back WITH INTEREST.
Maybe if the Big 3 built quality cars that Americans felt we could trust, we wouldn’t mind dropping $30,000 (a year’s pay for some of us, 3 hours “work” for some of them) on a car, and they wouldn’t be in the mess they’re in now.
- Posted by ChristinaIf these guys were serious about wanting the American People to believe them, you know what they should have done — DROVE! Yeah, how about getting in one of your best most fuel efficient vehicles and driving down from Detroit even if it took an overnight ride just to show people that you actually believe in your product? How about taking an Equinox and using hydrogen to power the trip…even if you have to drive a diesel full of hydrogen along side it…it would be worth the publicity! Imagine 3 CEOs from Detroit, “Road Tripping”, eating at funky diners, “mooning” people in Priuses as they ride I-80 to the East Coast.
- Posted by John Bailoany one who thinks that the auto,s will not get a bail out is not living in the reality of the 21st century.how many of the congress started their political careers via the trade union movement?ask dick durban.how much trade union funds were donated in the last presidential election?how many lobbyist do you think the auto industry has?if you think congress will not hand out wake up.
- Posted by brian leeReally shows how out of touch the CEO’s truly are with the pain of their everyday workers. They cry they will be out of money, yet when asked for specific details and time frame. None would provide. Let them forego their bonuses, reduce their salary, let them fly commerical like the rest, make the employees part owners in the compnaies and provide oversight. I can bet the expenses would come down. Let these fat cats start trying to care for their families on $50,000 or less a year. Not just the auto industry but all segments of US - lets bring things on a more balanced playing field. Instead companies outsource manufacturing to China so the big whigs can keep rolling in the dough.
- Posted by Karen HeartDiane - the average total compensation for a UAW line worker at any of the “Big 3″ is over $140,000 annually, and includes the company’s contribution to healthcare and other benefits…a little more than the $40-60,000 you suggest.
Kalyan, compensation should only be regulated by the government if the company has taken advantage of government assistance. In this case, if they do in fact receive federal funds, I think there should be strings attached with regard to executive compensation and Union wages. If not, then let the shareholders and board (and free market) make those decision, and own responsibility for the result - good or bad.
- Posted by SloanHaven’t we as individual taxpayers been bamboozled to the tune of $700 Billon? No more bailouts!
- Posted by PC