While Wagoner testified, his G4 private jet was parked at Dulles airport. It is just one of a fleet of luxury jets owned by GM that continues to ferry executives around the world despite the company’s dire financial straits.
“This is a slap in the face of taxpayers,” said Tom Schatz, President of Citizens Against Government Waste. “To come to Washington on a corporate jet, and asking for a hand out is outrageous.”
Wagoner’s private jet trip to Washington cost his ailing company an estimated $20,000 roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class.
There is something terribly wrong with the mind set of corporate executives who ask for government (citizen) handouts yet fly spending $20,000 per trip to do so or ask for government (citizen) handouts and then spend the weekend in 5 star private resports at company expense. I guess they simply don’t care that many of those citizens they want to pay for their life styles hardly make much more than $20,000 a year total. The coming depression is going to turn a lot of those executives into $20,000 a year tax payers themselves but it will be to late for them to learn to care.
Wagoner, Mulally, and Nardelli…….the Triumvirate of the Big Three. What can they do in a Gulfstream IV that they can’t do in a 737 Business Class cabin……and for a LOT less money? Nothing, because I’ve done it!
[i] Big Three CEOs Flew Private Jets to Plead for Public Funds [/i]
Oh, the rich irony of it!
It’s so dumb that it makes you wonder if they did it to trash the bailout on purpose.
It’s a union bailout as much as it is a corporate bailout. Is it possible the executives prefer chapter 11, but feel they have to go through the charade for political reasons?
Prediction: This will go down as one of the biggest PR gaffes in the history of corporate America.
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If the auto chieftans had to take a private plane, they could have taken one plane: i.e., let one CEO host the other two.
This is a ridiculous thing to nitpick over. This is how CEOs travel. Every CEO does it. The only reason this is a “PR gaffe” is because the media picked up on one grandstanding Congressman. If they had flown “in a 737 Business Class cabin” the media would have reported it as a ploy to gain sympathy. 24 hour news channels need to go off the air.
#6 I disagree. That may be how CEO’s travel, but they are asking us poor slobs who sit in the middle seats in coach to pay for their bailout…with no mention of $28million salaries or Gulfstream jets being pared down.
I think they are shaking us down–no real change, just taxpayers footing the bill for their incompetence and poor management.
“everyone does it” does not make it right.
A real case of “gotcha!” No wonder they want executives to step down as part of the bail out. Nothing would ever change. I heard today that they think with the $25 million/billion (whatever) they THINK they might make it through next year. And then what? Another $25, and another? Unless there are plans to change things that DON’T include paying people to play crossword puzzles with huge benefits, it will be the same thing all over again next year at this time.
In case anyone ever asks you what the term “tone deaf” means, refer them to this article.
The cost of simply having the jet and crew available on any given day is far, far greater than the estimated $20,000 cost to fly an exec to Dulles and back.
With the automakers hemorrhaging millions (or tens of millions?) in cash every day, one would think applying some tourniquets, among other steps, are in order. Maybe Chapter 11 [b]IS[/b] the best solution. Transfusing more cash into open arteries is not.
w.w.
[i] A real case of “gotcha!” [/i]
And kiss that bailout goodbye, forever.
“This is how CEOs travel.”
Maybe this is how CEO’s of successful money-making companies travel. I would suggest CEO’s of failing companies going bankrupt and asking taxpayers for billions should travel differently.
24 hour news channels need to go off the air.
Brian – I so agree with you there.
Daniel Boorstin had some pretty good pieces on the invention of news in one of his books. IIRC, it was based on the coverage of the Lindbergh Kidnapping. He made some interesting connections with the growth of the advertising “industry.”
I have no good will for what passes for acceptable American business management. But, I would suspect that there were reports (let alone instances) of greater crimes against fiscal prudence, common sense, and humanity that did not get past editors’ desks today. People respond to “crises.” Which situations make that grade depends on how they are presented and how we receive them. This one managed to push a lot of buttons. Bad move on the CEOs, good thinking by the politician and the editors.
I think Sidney might be onto something. These guys may not be as stupid as they seem.
I do not fly often but I must admit that I have never made it onto a commercial flight – I just don’t want to deal with the headaches and delays. I drive to a nearby airport, greet the pilot, climb into the plane, and have a pleasant trip to my destination. Out of all the dumb, foolish things that go on in Detroit, to complain about how the execs move around the country is a waste of ink and monitor space.
Don
I hope this means that congress will forget about a taxpayer bail out and that the auto makers and their stock holders (the ones who are losing money now) will begin talking about getting rid of spendthrift executives – maybe these executives think it is acceptable to have private planes at their beck and call but I doubt that their stockholders think it is wise for executives to spend money that could otherwise be reinvested in the company for frivolous purposes.
If they are really concerned they could start by putting the private planes up for sale – maybe they could start with e-bay – the way Sarah Palin did.
#6, The stockholders, those who are losing money now, should have more to say about this than the media and I hope they will pay close attention to the information that comes out of these hearings when they get their next proxy requests.
Re 17
Don,
Presuming that you are independently wealthy I have no issue with your choice of mode of transportation. You can travel first class on the Queen Mary to your next business meeting in London if that’s what makes you happy. To be honest, if GM (Ford etc.) were a highly profitable company I would be a bit less concerned about executive travel.
But these are not highly profitable companies. They are on the brink of bankruptcy and their CEO’s came to Washington with their hats in hand begging for public money to save their corporations (and presumably their jobs). That they would spend $20,000+ of their bankrupt company’s money (read shareholder’s money) on this kind of extravagant mode of transportation is highly indicative of what is wrong with the culture of the American corporate boardroom.
I believe there is a cancer in corporate boardrooms all across our country. And it is characterized by two things; unlimited personal avarice and breathtaking incompetence. Either alone is a bad thing. In combination they are a lethal danger to the survival of the company. And in large quantity they pose a risk to our nations economy.
Today I own very little stock. My main reason is not a lack of confidence in the American economy or the stock market per se. Markets rise and fall. Or even a lack of confidence in the American worker. I am convinced that by and large they are the best in the world. Rather it is a profound distrust of the people in the boardrooms. I really and truly believe that a significant percent, maybe even a majority, are not simply incompetent but are also devoid of any sense of ethical obligation to the shareholders (and all too often the employees) of the company as opposed to their own bank accounts, portfolios, and personal egos.
What is more, I believe that the above opinion is not mine alone. I think there is a serious crisis of confidence in our country on the part of the ordinary guy on Main Street with respect to the people who move in the boardrooms of Wall Street. And I think that until this lack of confidence is addressed a lot of people are going to be very gun shy about buying stock.
I know I am.
Will I loose money by shying away from the stock market? Most likely. But I will also sleep at night. I wonder how some of these CEO’s are managing that these days.
Under the mercy,
[url=http://ad-orientem.blogspot.com/]John[/url]
An [url=http://www.youtube.com/watch?v=Gj4pUphDitA]Orthodox [/url] Christian
Ford, GM, and Chrysler all made some bad decisions, and now they expect US to bail them out of the jam they’re responsible for? Let them file for bankruptcy under Chapter 11, reorganize by getting rid of all of the deadweight by starting at the top and working downward…..and that includes getting rid of non-productive wage earners and sweetheart union deals.
Let’s not forget all those greedy little congress persons and senators who take flights on the private jets of corporations and lobbyists and give speeches to industry groups, labor union conferences, etc. “all expenses paid plus campaign contributions” at luxury resorts . I don’t see any of them rushing to give up all their perks and live like ordinary citizens. There also is a large fleet of U.S. government business jets to ferry around military brass and high ranking government officials. Personal greed is not confined to the corporate executive class, but it makes for better sound bites by grandstanding politicians and unctuous newscasters.
#6, #14, #17
How very Liberal of you three. You need to re-read #21 about 6 times. Then, if you understand what he wrote, you might mature enough to see what is wrong with this picture. Someone who desires welfare, should not drive to the Welfare Office in a Rolls Royce. The leaders of much of our major industry in this country are so out of touch with reality that they act like Feudal Lords.
I have an acquaintance who was highly placed in one of these companies until he retired a few years ago. He was a direct consultant to the CEO of that company. His knowledge of the US auto industry is quite impeccable. He stated in many more words that the Big Three are on terminal life support, their leadership is arrogant and unwilling to make the changes necessary to be successful. They have neither morals nor ethics when doing business.
#23
Colonels and Generals in our military often fly commercial. Most can only get a military VIP flight if there is a need that cannot be met by commercial air. The four-stars do have this privilege but then they generally have extremely pressing needs to get from there to there.
You’d be hollering bloody h… if this didn’t affect you favored union goons.
P.S to the above, I am a retired Field Grade office of the US Military.
#22 – “Ford, GM, and Chrysler all made some bad decisions, and now they expect US to bail them out of the jam they’re responsible for? ”
In spite of the hubris evident in the executives’ actions, Congress will bail out Detroit and the American taxpayer should relax and enjoy it. Why? Because, after all the Unions have done for the Democrats, the Democrats owe the Unions more than $25 billion. And since the American people voted to put Democrats in control of a one party America, we have no one to blame but ourselves. Of course the Democrats will pay their Union dues. And what’s more, good for the Unions – their long-term strategy is paying off.
I would say that there really is little wrong with the CEO and others who are paid very high salaries to take the corporate jet. Many years ago when supersonic flight was available between the US and Europe, on night after supper we figured out what the salary of an executive needed to be to justify taking the much more expensive flight. It turned out that if really was not that high.
I worked for a company for many years which had a private jet fly between corporate locations. The cost per seat of that jet was more than twice the cost of airfare even when all ten seats were full. Nevertheless, the real cost after taking into account less travel time, less likely to need to stay overnight, and fewer car rentals more than made up for the travel cost. I took that flight often. I had times to fly by airline because the corporate jet was full, when I would do my travel costs it was always more. Add to this flying by airline often meant staying overnight when the corporate jet would have been a day trip this meant time I was paid to travel and not get real work done.
This may have been a PR mistake, but it was not a business mistake.
Chapter 11 is the best answer. It will allow for getting reasonable redo on union contracts. It would end people being paid full wages to play cards. It will not happen. Congress next year will be in the pocket of the Union bosses.
#28 —
The point is, whatever the business justification for the trip, it was politically stupid. And when you’re feeding at the public trough (or attempting to do so) it is only right to pay attention to the politics of what you are doing.
One other thing, the Executives are only playing the role they are expected to play. They are supposed to be evil, glottonous greedy and arrogant so that we the public will hate them all the more, thus sympathizing with the poor Union worker who is the real victim of these fat cat execs. It is all for the media, the deal is already done.
#24, my comment was about 24-hour news channels. I stand by it.
I have no good will for what passes for acceptable American business management. But, I would suspect that there were reports (let alone instances) of greater crimes against fiscal prudence, common sense, and humanity that did not get past editors’ desks today. People respond to “crises.â€
Yes, BlueOntario. Not only are there connections between “news” and advertising and a bias toward sensationalism, but there is also the matter of “news efficiency” – the story that’s easy (and cheap) to get, the story that has a ready-made “angle” or image. Never mind whether it’s the story that it’s most important for people to hear, out of all the thousands of possibilities out there each day. Twenty-four hour news channels just give the process a chance to become total blather and frothing at the mouth, whether about a hurricane, a wildfire, evil corporate executives or the disordered lives of the famous. It wasn’t smart PR to fly in corporate jets, but was it really worth all this copy? Was it that unusual? Do all the streams of people coming before Congress to beg for money hitchhike? If they had flown economy class on a commercial jet, would they have been said to be playing for sympathy? Closing the barn door after the horse was gone? (And would they have been on time?)
Has our country become grumblers and whiners on a par with our forefathers during the Exodus?
The execs come by private jet — we whine “unnecessary waste”
The execs come by commercial — we whine “PR spinmeisters”
The execs come by beat-up pick-up — we whine “hypocrits”
I am against a bailout, and I am not even sure about a loan, but for crying out load couldn’t we knock off with the whining, already?
{Sorry, I didn’t mean to whine.}
That was “loud” not “load”. (Sugar low before lunch.)
[i] There also is a large fleet of U.S. government business jets to ferry around . . . high ranking government officials. [/i] —Daniel [#23]
Since when? Cabinet secretaries flying within the United States have typically traveled on regular commercial flights. Ditto for senators and representatives. (The story might be different if you had a [i] group [/i] of cabinet secretaries or senators and a military plane were available.) And I haven’t heard of civilian deputy secretaries, under secretaries, and assistant secretaries getting custom domestic travel on government jets. Has that practice arisen since 9/11?
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I know of one case in which a Clinton cabinet secretary took a chartered jet home from Washington. He paid for it from his own pocket.
It seems that the position of Chief Executive Officer has morphed into the position of Chief Deal Maker, these executives do what they know how to do and that is to make deals.
If the auto companies really want to operate at a profit, they need to recognize the need for some old-fashioned engineers and managers who know their company and are more concerned with running it than with making deals.
A man reaps what he sows. What did these CEOs sow when they flew in their corporate jets to beg largess? The stupidity…the gall…the effrontery! They are so far removed from the reality of the common man, they cannot even recognize their own hubris. They are icons of what has gone wrong in corporate America.