Leave jets at home next time, Granholm says

[Truth Teller]

Source: Detroit Free Press

Gov. Jennifer Granholm has advice for the Detroit Three automaker executives when they plead their case again to Congress on Dec. 2 for a federal loan:

Make it clear that survival of the U.S. auto industry – and especially U.S.-made electric cars – is a matter of national security.


Secondly, park the corporate jets and fly commercial.


Granholm acknowledged today that the top executives for Ford, General Motors and Chrysler LLC left Congress cold toward their pleas for $25 billion in emergency loans to stave off bankruptcy.


She said the news of those executives flying to and from Washington in private jets to plead poverty created a damaging image that they can still overcome. She said they should fly in commercial jetliners next time.




Read more: http://www.freep.com/article/20081121/NEWS06/81121057/?imw=Y

[BR_Parkway]

1. Yeah, first rule of being a welfare queen is to look like a welfare queen

I know, balding overweight old white dudes in Lear Jets is a tough sell - but we need new stereotypes - and with you guys following the bankers so closely, you're making good progress.

Even Raygun was smart enough to have his stereotyped drive in American made cars!

[Raschel]

20. IMO it's a lame point. It's the workers who will pay the price. Not the CEO's. And congress knows it

[blue_onyx]

30. It is a lame point but...

the auto executives should have known it would look bad. It's interesting that Congress didn't seem to care whether the CEOs of the financial institutions flew in private planes.

[Skittles]

2. those GM execs no different than execs all over the country

their sense of entitlement is just sickening - seems like we have to force them to learn a lesson

[Eric J in MN]

3. Dumbest anecdote of the week: They rode private jets so no loan!

Do the CEOs of the Wall Street firms which got the $700 billion bailout avoid private jets?

If private jets are so wasteful, Congress could pass a law banning their use by executives of publicly traded companies.

But Congress won't do that.

Politicians just want to prove how stupid they are with the Omigod-they-rode-private-jets garbage.

[Sub Atomic]

5. The politicians aren't stupid. The taxpayers are pissed off.

They look at the use of private jets to go begging for $25 BILLION in tax dollars as the utmost height in hubris.

Additionally, they had no clue as to the actual amounts needed nor what they would do with the money.

Screw them if they think we're going to just bend over once again without some sort of stipulations attached to any loans.

[Winterblues]

14. Are you so completely tone deaf to appearances?

When you go begging for money don't do riding in a Luxury Private Jet Liner..

[Eric J in MN]

15. I don't want people who normally use private jets to do a phony show...

...of not using them for one day.

[bulloney]

25. They could have flown first class for $280 and coach for even cheaper.

But nooooo! They had to fly on private jets that cost $20,000 per round trip flight. Even GM CEO Rick Wagoner was caught off guard when confronted on this. That's how aloof these people are. They'd think nothing of slashing thousands of jobs, but downgrade your mode of transportation? Hell no! Don't even think of it.

It's always the cosmetic things that bite you in the ass. Had this story about the CEOs flying in private jets not seen the light of day, this would have been regarded as just another special interest group seeking federal assistance.

[Raschel]

18. Exactly. What did AIG execs ride in on? And now the gov't (we) is going to bail out Citigroup?

[lapfog_1]

4. I, for one, am unconcerned about their mode of travel.

There are numerous reasons for executives to fly by private jet.

It saves them money.

Think about it for a minute. If they fly commercial, the CEO and his staff have to travel to the airport, wait through security and so on, even if they fly first class they are unlikely to conduct any business while traveling, then deplane and travel from the airport to the destination. For a Detroit to DC flight, figure on 6 to 7 hours total, maybe more.

At the salaries they are paid, that's got to be $30,000 per person that travels of down time (assume an average salary here of $10 M per year). If the CEO takes 3 staff members, that's $120,000 just in travel time (one way).

Flying corporate jet is likely about 1/2 of time, something like 4 hours. Not to mention that for the majority of the time, they can still work while on the plane without fear of plans leaking to competitors or the public.

So... $120K for travel commercial (plus the cost of the actual tickets, the likelihood of a stay over plus wasted return trip the next day, versus $20K to $30K for the cost of the private jet.

Tone deaf, but not wasteful.

[skepticscott]

9. Agreed

it looks bad, certainly, but from the standpoint of business efficiency and productivity, flying private saves time and money for people at this level in the long term, at least in theory. Of course, when you're losing gobs of money everyday, like the auto companies, it might make sense to be a little LESS efficient at it.

[amandabeech]

10. Tone deaf, but probably defensible as a business issue if several execs

were on the plane.

[Robb]

17. Yes. Although the only problem I have with that argument

...is the notion that there is actually $30K worth of something lost in that travel time.

It's not like the plant would shut down while they were in line at TSA or something. :D

[lapfog_1]

26. That's not the point.

The corporation is paying these guys at least $5,000 per hour (we can argue over whether they are getting good value for that pay, but they are getting paid). They get paid whether they use their time to some effect or just read a novel.

I submit that the CEOs and their top 2 or 3 advisers cannot effectively work while traveling commercial, simply for security reasons if nothing else. Even simply sitting in first class and reading reports might subject the company to undo risk of loss of privacy. And forget about discussing such issues as "what do you think that Congresswoman so-and-so will ask at the hearing later? do we have all of the information she might require?". Besides, a private aircraft allows them to stay in touch with their office almost continually, so that something that comes up can be dealt with right away and not left to "they will be back tomorrow and we'll have your answer then".

So they fly and sit, possibly reading a novel or doing family stuff or whatever. Not productive to GM stuff.

Then there is the time lost transiting and waiting at terminals (I know, we all do that, but we don't get paid $5K an hour).

From a business decision perspective, once you have decided to reward these clowns with that type of salary, you want to get the most "bang for your buck".

Any case, I think flying private jets is not an unreasonable expense for certain corporate executives.

But flying private jets to ask for $25 B to $50 B of taxpayer money was a very tone deaf decision. And that demonstrates how out of touch these people become when they are rewarded the way that are.

[Tansy_Gold]

32. yes, but it pays them that rate whether they are on their own plane

or someone else's plane. The company doesn't save their salary just because they fly commercial v. private.

Remember, too, that the company pays for the leased jet even while it's sitting on the ground, as opposed to paying for commercial flights only when needed.

It's not merely about appearances. It's about the failure to understand that there are costs involved in EVERYTHING, and those who have no clue about the costs shouldn't be out there begging for money.

[eilen]

35. Please, these guys are not hourly workers

they are on salary and they write off their travel expenses (Lear Jet more expensive than coach tickets). Plus, they are exempt from earning overtime. Flying on their own jet is a convenience, a very expensive convenience. They could fly coach but then no one would be catering to their every whim. They sell cars, why not drive one?

[bulloney]

27. It's called living within your means.

If your company is weeks from running out of money and shutting completely down, then adjust your lifestyle and spend less wherever you can. Hell, they should have been doing this months ago. This didn't just sneak up on them overnight. It's about an hour's flight from Detroit to Washington. How much work are they really going to accomplish in an hour?

Preparation for the task of the magnitude they were addressing Congress for should have been done before they left for the airport.

IF Congress approves a bailout for these companies, there better be some STRICT conditions attached. Like, no investment in new plants in foreign countries. No use of private jets that cost 100 times more than flying commercial. And use the money to develop vehicles that consumers will actually buy due to quality and fuel efficiency instead of Hummers and their bastard cousins.

[w4rma]

33. What's wasteful are the executives' salaries. If they were paid a reasonable amount then flying

commercial would save money.

[Pathwalker]

6. No kidding - they wouldn't even jet-pool?

Contemptuous rat-bastards, aren't they?

[HCE SuiGeneris]

7. I know I always try to jet-pool to conserve my resources.

:P

[Tandalayo_Scheisskopf]

8. I agree.

But I always end up fighting with my friends over which jet to take: The G-IV, The Lockheed or the Custom 757. It gets so tedious.

[RC]

11. Your Custom 757 needs some remodeling.

It's starting to look a little dated. a few more years and people will start feeling a little embarrassed to ride in it.

[Tandalayo_Scheisskopf]

13. Oh, don't I know!

But with the economic downturn, I am a little wary. After all, how far can you expect someone to stretch his $5 billion?

I must tell you, this situation has caused me to stop napping in the afternoon. The pain of it all.

[HCE SuiGeneris]

12. Sometimes I actually go slumming in the HAWKER 850XP.

It is quite embarrassing, now that I think about it. :blush:

[frylock]

24. the lockheed makes you look like a hillbilly..

best to go with the G-IV.

[hedgehog]

39. Jet pooling would have exposed them to charges of conspiring together

for the 4 hours they were sitting together.

[PADemD]

16. Has anyone found out from whom they charter their coporate jets?

[jmowreader]

31. They own their jets

Only poor Fortune 500 companies charter jets.

Oh...wait...never mind...

[4lbs]

19. I get what some of you are saying about the business productivity aspect of flying private jets.

However, haven't these same Big 3 CEOs flown private for at least the last decade? Hasn't really improved their decision making or business acumen has it?

:rofl:

[amandabeech]

23. Mulally, head of Ford, and Nardelli, head of Chrysler, haven't been around for more than 3-4 years.

Wagner has been in the business longer.

Mulally turned Boeing around. Nardelli was with Home Depot and GE.

Ford, GM and Chrysler are not in the same situation.

In fact, if the economy turns around and credit is available, Ford may not need the loan because they've been doing a lot of changing and have a plan to cut costs and make more fuel efficient cars from their European line-up here.

Each of the Big 3 have filed plans to take advantage of the 2007 energy bill's offer of low-cost loans to re-tool their plants.

The UAW 2007 contract has allowed huge cuts in labor costs through 2010 or so.

You and so many others, including many Senators, have not kept up with what has been going on in Detroit in the past 3 years or so.

I strongly suggest that you do some research this weekend so that your posts reflect an understanding of the CURRENT situation, not what was going on 10 years ago.

[annabanana]

21. They went to DC, KNOWING they'd be on TV in front of a bunch of politicians.

They KNEW they were asking for a buttload of cash, they must have known that people out here in dumb suckerland know the money would be coming out of OUR pockets..

Coming separately by private jet was just plain boneheaded.

[Blue Gardener]

22. So we want to punish the workers

Because the CEO's took the corporate jet to Washington? Here's a newsflash...large corporations have private jets, it's nothing new, or unique to the Big Three auto companies. How many senators take advantage of offers to ride corporate jets instead of commercial? I would bet many of the same senators bitching about it now.

[gratuitous]

34. No, it's nothing new or unique

But I don't see the heads of Microsoft, Google and Yahoo begging Congress for money. A friend of mine pops by to borrow a C note, he'd better not leave his limo idling in my driveway.

Also, if it's the workers whose butts are on the line, why are the overpaid fatcats who ran these companies into the ground the ones parading themselves around in Washington? Send some men and women off the production line since they're the ones at risk.

[bluecollarcharlie]

36. Uh...probably because they have work to do......

....besides, someone has to pay off that $306 BILLION check to Citigroup. But i have a suggestion for you: why don't YOU go down to one of the assembly plant and cover for them while they go make their case? You get to learn about the difficulty of the jobs they do and maybe get to find out what real hard work actually is.

[gratuitous]

38. I suggested sending line workers

I suggested sending line workers because I figured they'd have better, more substantive information to offer the committee than would the folks who've run the company into the ground.

By the way, I know "what real hard work actually is," and your condescending tone isn't very much appreciated.

[hoosier_lefty]

28. sorry but... pot meet kettle

Seems silly to sit on your high horse when you get
free unlimited health care and a super gravy pension
and talk ahbout looking out for the people.

I suppose there were no perks and luxuries at AIG or any of
those other firms that already got a handout.

[fortyfeetunder]

29. What NPR said this morning: Drive to DC from Detroit

in a subcompact hybrid car, the 9 hour drive...but concluded neither of the Big 3 made subcompact hybrid cars!

[Scout]

37. why don't they drive in one of the cars their company makes? n/t