Auto Executives Will Have To Give Up Their Private Jets
One of the conditions of the auto bailout is the elimination of private corporate jets. Guess they probably shouldn't have flown them to Washington to ask for a tax payer bailout. Whoopsie!
The NYT says:
To gain access to the loans, G.M. and Chrysler must agree to a range of concessions, including limits on executive pay and the elimination of private corporate jets.
Ford, which is not seeking government aid at this time, can carry on business as usual.
The various cuts at the troubled companies are likely to be steep and universal— because under the terms of the deal the automakers have until March 31st to become "financially viable" in the opinion of the Obama administration — or the loans will be called in and the government will be paid before any other creditors when the companies go into bankruptcy.
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OK, what about the pilots, ground crew, maintenance personnel, etc. who are now out of jobs? B/c I doubt the average pilot knows how to install a car seat.
Image aside, this is a dumb idea. GM, for example, has extensive operations in China and South America. So management is supposed to (a) charter a flight, or (b) get on a plane with regular folk?
I'm all for limiting their access to frivilous things, but allowing a plane or two for strict business needs seems OK to me.
Doesn't bother me one bit. Find alternate transportation.
@Ben_Q2: I don't know. Could be. But that pilot will have to take a hell of a pay cut and be one of the first to be laid off, as I'm sure the union won't honor his seniority from the pilots union.
@The Name's Ash78, Housewares: Let's face it - the airlines have won this round. "Oh, only evil, selfish people would utilize the fact that the airlines don't fly to 95% of airports in America to improve their businesses..."
Let's see how people would react to the same idea on a personal level: Want to claim your economic stimulus check? You can't have a private auto... Never mind that you can drive it to the grocery store, school, church, community events - we're going to make sure that you don't drive to the beach ever again!!!
@shorty63136: And what about everyone who will now be let go? Does it serve them right for being employed? Do they deserve to be fired b/c some news agency sensationalized their job?
Does it specify jet, or is it all aircraft? I've got a dirigibles business I've been looking to get off its feet. This would be a great opportunity for me. Or they could just buy some turbo-prop planes.
@Norcross: The agreement is that they can't own private jets...they can still charter them, I believe. And it might encourage them to stay in the office and do more video conferencing.
This is crap....I'm employed by one of the major General Aviation manufacturers, and it is really sad to see a tool maligned so badly. For wanting to help the automakers succeed, I'm amazed that they deny a tool of efficiency.
Corporate jets aren't about traveling in luxury...they are all about creating time.
Having traveled via GA, it is truly amazing the amount of actually work you can accomplish in a day, even when having to travel all across the country. You no longer have days lost to travel.
and what were the conditions on the bank bailout again?
Anyone know what Madame Pelosi flys around in?
@The Name's Ash78, Housewares:
I must respectfully disagree. Here's why:
Back in the 20th century,we invented this thing called an "Air" "Line". It "flies" to most places that are covenient to assembly operations,suppliers and financial hubs. It's what the CEO 's require their underlings to use,so it's probably safe for the Big Swinging Dicks in the corner office to schlepp around in. (Unless,of course,their seatmate ever owned a Cavalier,Escort or Jeep Compass).
Later in that same century,we discovered that if you hook up two "computers" together,it would be called a "network". Smart guys can hook up lots of these and have "meetings" that don't require the participants to ever leave their office ! The CEO's could thus wreck their companies while sedentary.
Face it: The hard truth here is that this corporate royalty doesn't want to rub elbows with the likes of...Us. Their companies are b-r-o-k-e .They don't have us by the nuts anymore.Just like they refused to adapt to a world of expensive gasoline,they have refused to adapt to a world where a corporate thrill ride is a damn luxury.If its too much of an inconenience,they can stand up at their podiums and man up by resigning.Otherwise,they should STFU and build a decent car and worry about their lifestyle appliances later.
@The Name's Ash78, Housewares: This not efficient. The very problem is that they are using these jets when they don;t need to. If you need to go to Spain? Fine. California from New York? Alright, fair enough. Three states over? No, that's silly. Especially when that much fuel gets burned to move one person those shorter distances, nevermind the resources expended in building all these one-user jets.
The fact is, these jets just aren't necessary for most of the use they are put to. They are also a waste of investor money and company profits when they could just as easily do something much, much cheaper, such as use on the the time-sharing services that allocates a jet like this between several people who schedule their need for it.
I'm not exactly sure this is how the government is supposed to be teaching capitalism to these corporations.
Other than solving an image problem, I fail to see how this saves the company any money. Seems like we're getting a little distracted on which mess is the most important to clean up right now.
@24/6_GitEmSteveDave loves->★: Most "private jets" are actually rented out. This may not be the case here, but if it is then no one's actually losing their job over it.
So there's nothing in conditions that state they can't charter/lease a PRIVATE jet?
That's still expensive. Waaay more expensive compared to commercial flights.
To all you Wal-Mart bashers out there. All executives (including the CEO) at Wal-Mart fly commercial (not first class either). Stay in budget hotels 2 per room (including the CEO). They been doing this for years. So don't tell "a international fortune 500 company can't fly commercial"
Yes the Walton family has private jets THEY use. But the company itself doesn't use them.
Ms. Pelosi initially demanded a Boeing 757 (no kidding!), or more technically an Air Force C-32. H-u-b-r-i-s? or C-h-u-t-z-p-a-h? I can't tell which (or both).
@Scoobatz: Well, even though they own the planes, they're losing money by needing to pay for fuel, paying the ground crews, and the hangar space to store the aircraft. It's sort of a save if they can charter planes owned by other companies.
@24/6_GitEmSteveDave loves->★: Probably no more than what the average storm trooper knows about how to install a toilet main.
So let's recap.
Originally, the executives flew to DC in corporate jets to beg for money. Then someone pointed out that irony. So the executives return to DC by driving, a la some college roadtrip. In doing so, they use it as a "teaching moment", showing us the virtues of cars that won't be in the showroom for years yet. Now, one of the stipulations of the bailout is that the auto corporations can no longer fly corporate jets.
What a goddamned, window-dressing circus. Those executives, the government, and the unions fat cats must all take us for saps. And they probably have good reason to.
@24/6_GitEmSteveDave loves->★: Nobody deserves to be fired unless they're not doing their job. It sucks, but having a private jet is not a necessity. It's a convenience.
I would hope that they find them alternative spots within the company or elsewhere, but they may not.
All this layoff stuff is not easy for anybody - 9 people in my office got laid off yesterday...and not because we're doing bad. Our office is making more money than any of the other offices, but the other offices need to retain staff so they cut ours. It sucks all around.
@Snarkysnake: So all those execs who fly out of Teterboro in NJ should instead brave 1-2 hours of travel to JFK, LGA, or EWR just to get where they're going? That's the most obvious NYC example that comes to mind.
I'm not saying these guys wouldn't be better off in a fractional ownership situation ("jet timeshare"), just that requiring them to fly the airlines is not only a waste of time in 90%+ of situations, it's also a security risk to many of the people flying. They have a lot of enemies.
Now if every single business venture just happens to be less than 30 minutes from a major airport, then the airline concept might make sense. But most areas only have executive or municipal airports that allow people to get in and get out far more quickly. Going from Detroit to the Shreveport plant? Sure, let's fly to New Orleans or Dallas, sit in the airport for a couple hours, then take a commuter plane. Round-trip, that burns a whole day with maybe a couple hours for meetings.
Or they can leave at 7am and be home by lunch. This is all just academic based on the general business case for jets. I'm sure these guys are wasteful in a lot of what they do, but this isn't necessarily a good example.
I'd also love it if politicians were held to the same scrutiny.
FWIW, I'm anti-bailout; simply trying to keep the focus on what really matters in these companies' idiocies.
@Sidecutter: Rarely is it one person on board (unless you know something I don't).
Most large companies run several jets as a private airline, and these execs don't travel alone--the exception I've heard is that Mulally commutes on a jet to his home in Seattle, which is frivolous and he should probably stop doing.
Sensible provision. The world's major cities are well served by commercial airlines. There should also be a requirement that they fly coach, though.
@ChildrenAreSticky: Understood. I'm just not so sure a lot of thought went into this decision from a financial perspective of either supporting it or defending it.
Based on experiences within my own company, executives don't spend a lot of time planning meetings for the distant future. Using commericial airlines will probably not serve them well if many people need to fly often or with little preparation.
@AcceleratedDragon: And yet the story about the pork in the governors' transportation proposals included a story about asking for public transportation funds to build hangars for more private jets at the Bentonville airport.
Really this is bullshit. It singles out one industry, are they only allowed to serve chicken in the company cafeteria? Jets are a tool when used for company business. They increase productivity and in many cases reduce costs indirectly and directly.
Jesus, again with the corporate jets. Out of everything discussed in the Big 3's first begging session, of course that was the one thing that was pounced on and blown all out of proportion, to the detriment of everything else.
So they have corporate jets, big deal. They're CORPORATIONS. You don't want to have to hold up an important meeting in another country because the visiting CEO is stuck on a runway somewhere for 8 hours. Sure there's room for abuse of them, but I would imagine the majority of their use is legit. In fact I remember reading that a couple of the corporations had rules INSISTING that their CEOs fly privately.
Now eliminating the huge salaries and bonuses is something I can get behind, but the jets thing seems like a case of missing the forest for the trees. It's only an issue because it makes for a good sound bite.
@AcceleratedDragon: That is 100% wrong, the jets are used by anyone in the company who can justify them.
Is AIG going to have to give theirs up, too?
I am amazed at all the travel that they think they need to do. Do I need to see someone face to face in order to ask a question or answer one of theirs? No. We have phones, web conferencing, video conferencing. If they feel they *must* fly, then they *must* deal with TSA, long lines, delayed flights and 3oz liquid restrictions like the rest of us. Don't like it? Pick up the damn phone and call the guy you need to talk to. Still don't like it, figure out how to make your company profitable without begging the American tax payer while thinking you are above them. Jackasses.
>>Face it: The hard truth here is that this corporate royalty doesn't want to rub elbows with the likes of...Us. Their companies are b-r-o-k-e .They don't have us by the nuts anymore
You just described the government of these United States. Talk about a useless waste of expenditure. Can we require THOSE idiots to quit taking what amount to bribes and kickbacks, start listening to their constituents and act responsibly when it comes to budgetary constraints? Instead of gleefully handing out taxpayer dollars to every failed industry and funding pipedreams such as socialized healthcare?
@moore850:
Absolutely nothing, considering that the only teeth that law had was stripped out by Bush before it passed.
Funny how that works, isn't it? $700 billion for free, used to just buy more banks and "retention bonuses", but $17.5 billion is super-scrutinized and hated upon, when it'll actually keep jobs around.
Sigh.
@ChildrenAreSticky: OR they could start their own charter business and make some money off of those planes they own. AND pay back the government/taxpayers. Problem solved!
@redskull: Maybe the president should get rid of Air Force One and fly commercial to help cut government spending too.
It's pretty ridiculous.
Today, I'm very happy I drive a Taurus.
Hey why not bail out the homeless by giving them each a dollar and telling them the condition is they can't use carts to move their stuff around? I bet that will fix that situation too! We're just a few steps closer to the worst economic crisis in the history of the world. How long until our money is worthless? Maybe I should buy a lot of iPods, they might be the most valuable object on the planet.
@AcceleratedDragon: The automakers already don't own their private jets, they lease them. So this means No Private Jets.
oh no they are going to have to mingle with the people that buy their cars ( or in the big three case NOT buying) maybe just maybe they might talk to the people who are buying the other brands and get a clue.
@Xkeeper: Agreed. It's amazing that we have spent so much, and will continue to spend so much, to fund banks and insurance companies that had basically, literally, become bankrupt because of bad management decisions and poor risk controls. And the people responsible for managing their companies into the ground,m having profitted so tremendously over the past decade or so, now face only a slight reduction in their impressive bonuses. And having taken public money, the banks as a whole continue their "bank strike" in refusing to release capital into the lending market. How is this different from a union imploring its members to refuse to release their labor into the market?
It is going to be real fun when China, Japan et al goto the WTO and complain about the bail out.
For years the US of A has accused China and Japan of dumping cheep cars in America. Also, they complained to the WTO again when EDS was being bailout by France.
We will see.
If your company does business in a couple of contiguous states, you probably don't need a jet. If your company does business all over the world, you almost certainly need a corporate jet.
I love how image and perception has completely eclipsed efficiency here. And ironically, too.