Big Three auto CEOs flew private jets to ask for taxpayer money

[sweeps]

"There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses," Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

Article

[Broken Arrow]

Yeah, it's all over the internet and people are up in arms over it. Major, major faux pas there.

[Broken Arrow]

A thought provoking article on the subject matter.

[Ima saver]

The cost to fly each jet to washington from Michigan was $20,000. they could have flown commercial for $288. One of the big 3 C.O.'s lives in Seattle and he flies home from Michigan every weekend. What a waste of money.

[disneysteve]

As I posted in another thread, I have mixed feelings about this. I don't think the numbers are as dramatic as the media would lead you to believe.

How many people actually went on this trip? I'm sure it wasn't just the CEO. It was probably him and bunch of his other top execs and support staff. Let's say there were 10 of them. Flying commercial can be reasonably priced when tickets are purchased weeks in advance, but this was a last minute arrangement so they probably would have paid top dollar. That $288 fare would probably have been more like $500 or higher, so if 10 people went, that's $5,000 right there.

Have you flown lately? If you have to be at your destination at a certain time for an important meeting, you had better be flying the day before to account for the almost certain delays and cancellations that might occur. That means those 10 people would have needed hotel rooms for a night. Five hotel rooms at $200/night (no such thing as a cheap hotel room in D.C.) would add another $1,000 to the total. Add in meals and ground transportation and the total for the trip would probably be $7,000 or more. And as noted in the article BA linked, the guys couldn't have done any work while traveling and time is money.

The other point I'd make is that $20,000 is nothing in the big picture. GM is losing over $2 billion/month. Cutting out a $20,000 plane flight (and replacing it with a $7,000 trip) would accomplish absolutely nothing. The company spends that much in a couple of minutes in routine operating costs.

So I agree that the public perception is lousy, but I don't think this is really an issue that matters in the grand scheme of things. Not that I'm trying to defend wasteful spending, but I just don't think this is really as wasteful as it was made out to be.

[sweeps]

Originally Posted by disneysteve

GM is losing over $2 billion/month. Cutting out a $20,000 plane flight (and replacing it with a $7,000 trip) would accomplish absolutely nothing. The company spends that much in a couple of minutes in routine operating costs.

It would accomplish a LOT. It would prove that these guys are willing to do whatever it takes to turn their businesses around. That taxpayers are helping people who will help themselves first.

The privates jets are a small expense but a huge symbol of how out of touch these CEOs are with reality.

[disneysteve]

Originally Posted by sweeps

The privates jets are a small expense but a huge symbol of how out of touch these CEOs are with reality.

I agree with that. I think the private jet thing is about perception much more than it is about the actual cost.

[Maismom]

Originally Posted by disneysteve

I agree with that. I think the private jet thing is about perception much more than it is about the actual cost.

I understand what you're saying. At the same time, their current problem is accumulation of these unnecessary spending.

I feel sorry for people working for these mismanaged companies. However, I feel GM needs to go under Chapter 11 to turn them around. It seems that they don't want to give up anything while they want us to give up many things.

[cptacek]

Hey, those executives need to travel in those jets. Leave them alone!

--signed, someone who works for a private aircraft company

[jIM_Ohio]

Originally Posted by Broken Arrow

A thought provoking article on the subject matter.

Yes a good article

It's all the unions' fault. Generous union protections clearly pumped up Detroit's costs in the past and added to bloat, but recent concessions have solved many of those problems. Many other factors now weigh more heavily on Detroit: Soaring healthcare costs, especially for retirees the automakers are still responsible for; poor strategic planning; and buyers who can't get loans. The biggest problem with the unions might be unrealistic expectations fostered by leaders like Ron Gettelfinger—because many of the job and wage protections of the past are no longer there.

The UAW is good. Did you know the first day of hunting season is a corporate holiday at Ford, GM and Chrysler? Absenteeism is so high that day that the UAW was able to get that included as a holiday.

So in addition to getting the 8 normal federal holidays (new years, memorial day, 4th of july, labor day, thanksgiving, day after, xmas eve, xmas), the UAW also got the "extras" like MLK day, Presidents day, good friday, veterans day and NY eve. That is 5 more days (a whole week). Add in some extra like first day of hunting season, floating holidays to accomodate the 4-5 other holidays for the religions not covered and a UAW member now has close to 5 weeks off before vacation is even considered. A 30 year UAW employee might get 6 weeks vacation, plus 5 weeks worth of holidays.

If any of you private business owners ran your company that way, would you make money?