First Draft: sputtering autos
President Barack Obama gives his verdict on auto industry restructuring plans at 11 a.m.
Apparently GM and Chrysler, both seeking government money, did not pass with flying colors. White House forced GM chief Rick Wagoner out and wants Chrysler to work out a partnership with Italy’s Fiat — could that spawn a PT Cruiser Panda?
Lots of chatter on the ousting of Wagoner. Two main questions being raised — why was the White House tougher on automakers than bankers on this front and is it the proper role of government to depose the head of a private company?
Michigan Governor Jennifer Granholm told NBC’s “Today” show that it was clear that Wagoner was a “sacrificial lamb.”
Don’t drink and drive. Beer wholesalers and brewers holding a conference in Washington this week, wonder what’s on tap…
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Photo credit: Reuters/Jason Reed (GM’s Wagoner wipes eye during meeting)
Shocker: Fat cat CEOs fly on private jets!
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).
The private jet situation cuts to the core of the problem with Detroit. So does the CAW and UAW announcement today that they have no intention of giving up any pay or compensation to alleviate a crisis of their own doing. While the Detroit executives pad their wallets and sip champagne on their private jets, compare this to the CEO of Japan Air Lines. Until JAL gets out of financial difficulty the CEO is eating in the cafeteria with the workers, got rid of his company car and bought a used Toyota, and reduced his pay to $1 a year. Quite a difference from the pigs at the trough we have here in America — who deserve nothing. Let Detroit go bankrupt. Why should we taxpayers support their arrogance and incompetence? It will NEVER change.
Timothy Geitner wants control of the remaining financial industry not under FDIC or SEC. The White house has forced out Rick Wagoner. I do not believe the Federal Government, specifically the Executive Branch, should be hiring and firing CEOs or determining what companies stay in business and what don’t. Germany, Japan, India and other nations are providing assistance to their auto industry with out such draconian measures as we are seeing here in the U.S.. There is a power grab by the Executive branch that is unprecedented in U.S. history. Congress seems unfazed. I believe no such parallels can be found even during the war time economy of the 1940s here at home.
A quote from George Washington’s farewell address to the nation concerning the distribution of power in government seems appropriate. “But let there be no change (of power) by usurpation; for though this in one instance may be the instrument of good, it is the customary weapon by which free governments are destroyed”. Perhaps a review of the 1930s global economic collapse and the subsequent rise of fascism will provide us with much needed lessons to learn here at home.