Wichitans aren’t ones to criticize people for using business jets, but the chief executives of the Big Three automakers sure were tone-deaf in flying on company planes to their Capitol Hill meetings this week about a $25 billion bailout. “There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” Rep. Gary L. Ackerman, D-N.Y., told the CEOs. “It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo.”
Rep. Peter Roskam, R-Ill., also pressed General Motors CEO Richard Wagoner and Ford CEO (and Kansas native) Alan Mulally about whether they would be willing to work for $1 a year, as Chrysler CEO Robert Nardelli has offered to do.
“I don’t have a position on that today,” said Wagoner (2007 total compensation: $15.7 million).
“I think I’m OK where I am,” said Mulally ($21.7 million).
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37 Comments
Why should they save money?
They’ll just have to give it to the workers . . . or their shareholders . . .
“I don’t have a position on that today,” said Wagoner (2007 total compensation: $15.7 million).
“I think I’m OK where I am,” said Mulally ($21.7 million).
And they whine because some of us peons don’t want to give them our money.
Note carefully; the Chrysler president’s offer, as I understand it, to work for $1 per year dealt only with his base salary. I didn’t see where he offered to forego stock options and other compensation enhancements such as a bonus, just offered to limit his salary.
With those salaries and the use of only one corporate jet at a time the best thing to do would be to give these guys another tax cut. They are scrounging.
Or maybe they can take their salaries and buy a few thousands cars to keep the company afloat a little longer.
Good point avtolle – but I still wonder why the Bush Administration was so gung ho on helping out AIG but not the 3 US automakers?
Wasn’t AIG’s first bailout more than $25 billion and then they came back for more a few weeks later? Then we learned where AIG spent $400,000 on a spa resort trip and now they are planning to spend $500 million on bonuses to keep their best and brightest talents from leaving the company.
I have to question their logic there – if this is their best and brightest and they ran the company to ground, then why pay $500 million more taxpayer money to keep these morons in charge?
I questioned the bailout package from the beginning but thought if it would keep the economy going, then we needed to do it and bite the bullet. But, obviously, the bailout taxpayer money is only reserved for those on Wall Street and not the blue collar workers on Main Street?
That is exactly what this looks like to the average American – another case of the fat cats get richer.
AIG is an interesting example of how a multi-faceted corporation may be brought down by poor operations in one of the subsidiaries, while the rest of the organization remains profitable. Thus, the insurance part of AIG (heavily regulated, BTW) is very profitable, and another arm of the company went to insolvency dealing with the exotic securities backed by mortgages, and the collateral debt swaps associated therewith.
So, given the profitability of the insurance subsidiary, should not bonuses be given the executives to retain them and perhaps make that part of the combined operation one which may be sold at a profit to raise capital?
To amplify a bit; if AIG had already, before the bailout, established a compensation fund to pay bonuses, etc., and this bonus fund was from its profitable insurance operations and held be the insurance subsidiary, should the insurance subs’ executives forego compensation “earned” under their contracts.
Arriving via ox cart and toga would have been classic and perhaps a bit over dramatized.
Never the less, an impressive entry cheered by the masses with permanent memorials on cereal boxes…
Hey, these guys are AUTO manufacturers! Shouldn’t they have driven their own damned SUV’s to Washington? If they had, they might have noticed how often they had to fill up and how much it cost, and maybe figured out why they weren’t selling!
I think too much is being made about the use of corporate jets. All major businesses use them. Now if they are updating or ordering new ones while going under that would be much more relevant.
That was justa a Senator pandering to the masses.
Should AIG Insurance be allowed to have a subsidiary that speculates in exotic instruments? Kind of defeats the purpose of regulating the parent company. Much like these banks were allowed to speculate ‘off books’, in the same.
Nero bush fiddled (or was he strumming gitar?) while our financial house burned.
Phantom, it is my understanding that the insurance part of AIG and the investment part of AIG were subsidiaries of a holding company, created to own the various parts of AIG; not that the insurance arm of AIG was the parent corporation.
Realistically, the cost of the private jets is figuratively a drop in the bucket compared to the billions these companies are losing and asking for. But, the imagery of using 1 private jet per CEO to beg for money is just too crass to overlook.
Crass? Absolutely.
But do you want to bet it never crossed their mind(s) not to?
Dennis
“Raptor” observes –
“…the cost of the private jets is figuratively a drop in the bucket compared to the billions these companies are losing and asking for. But, the imagery of using 1 private jet per CEO to beg for money is just too crass to overlook.”
Ya think?
A hundred years ago, if Henry Ford showed up for work before any others he could park his Model T next to the company’s interest. If he slept in, he’d have to find an empty slot somewhere in the vast parking lot* full of Model T’s because he’d doubled the prevailing factory worker’s wage and created a bunch of blue-collar workers who could actually afford the product they were manufacturing.
* Imagine what it was like to find your Model T in that lot, what with them all being alike in “…any color you want…so long as it’s black.”
Back in the 1980s Tom Peters wrote a best-seller “In Search of Excellence” which profiled top companies in the era. Granted, not all of his examples (Atari, for example) thrived. But many of them have… or did until they were bought out by arbitrage. But many companies (especially in Silicon Valley) operate with that simple bit of employee-management parking lot democracy.
Talk about “a drop in the bucket.”
But how many line-workers at the Chevy plant have access to a General Motors private jet to, say, take their sick child to a cancer clinic? Ha!
But the CEO (and the CFO, and the COO, and assorted members of the board of directors…) of General Motors (and Ford, and Chrysler) took off from the same airport in Detroit, at about the same time, to fly to Washington to beg for money from the taxpayers… and every one of them took a separate private jet.
(I realize this is a touchy issue in Wichita, where the more one-executive-to-a-jet means a good job market. But c’mon. Couldn’t some of them
carjet-pooled?!I mean, really.
Two elements typify most CONs’ contributions to this forum, indeed to the political climate of America; at least a pre-Obama America. Those CONservative traits are a strange combination of arrogance and ignorance.
We see it in the global warming debate, in the anti-evolution kerfuffle, in the “Snowflake Baby” schmaltz, in the attitude that considers faded Levi’s are suitable church clothes if they’ve been laundered within the past fortnight.
The late Steve Allen called it “DUMBTH“. Stephen Colbert cleaned it up and calls it “truthiness.”
George Dumbya Bush institutionalized it for eight years of macho (albeit) illegal and immoral war in Iraq, homophobia, anti-abortion rhetoric (and ONLY rhetoric… and it worked because of Dumbth.
The only way capitalism works is if the workers can purchase what they manufacture. When the owners and management and stockholders get too greedy, the whole house of cards collapses because there’s no one left who can afford to buy what the workers produce.
That most certainly is not anyone’s definition of “socialism,” (unless, of course you’re an antebellum plantation owner, I guess).**
** And, come to think about it a lot of CONservative participants in this forum seem to think that way.***
*** Like, when you have some heavy labor to do, you call on your “boy” to come do it for you.
Near as I can ascertain, at least six and as many as eight private jets took off from the same suburban Detroit airport to carry automobile industry executives to their appearance before Congress this week to beg for more money from you and me and every taxpayer.
(As a practical and tactical matter, I’d think a few of them might have doubled up on the flights, just so they could get their stories straight en route to their beg-a-thon. But, no. A Learjet with two egos on board is so crowded.)
The guy who heads General Motors has no idea what the guy who’s gonna buy a Chevy considers.
The gal who tortures the rules of “standard accounting principles” ’til they’ll confess to anything has no concept of what it’s like to actually hear a banker on the other side of the desk say you can get the loan.
The health insurance actuary has no idea what it’s like for a physician to tell someone there might be a cure for their cancer but the HMO won’t cover it.
The stock-holder of for-profit health insurance considers any year they get by without cancer is good year for them, so long as they can collect dividends from premiums that will deny their customers treatment that can save a child’s life.
This is the consequence of arrogance and ignorance. Ignore that which makes you uncomfortable and be arrogant about everything that works to your personal benefit:
Dumbth.
I mean, Ronald Reagan’s lowliest Welfare Cadillac Queen had the common sense to park down the block and show up in tacky clothes. The CEOs of Detroit flew their Citations and Learjets and Gulfstreams into Washington, stepped into their limousines, and were let out atop Capitol Hill at a convenient entrance so they could plead poverty.
One of them should have taken a bus.
After all, his company manufactures most of them.
And they say irony is dead…
“I think I’m OK where I am,” said Mulally ($21.7 million).
=============================
Perspective:
With his pay you could pay 217 workers $100,000 a year.
The whole private jet show delineates the problem with the business side of capitalism in this country. Ceos, COOs, and all the upper echelon of the business world, have no clue what their hourly employees do anymore. The world, to them, consists of stock options, club memberships, private jets, private “deals”, and, the bottom line, how much can I make for myself this year.
I have no problem with capitalism, as a way to do business, but the state it’s in today smacks of a caste system gone mad.
Just look at the big three today: big cars? Everything but the kitchen sink, and built fairly well = big bucks for the three. Small cars = no profit, so build em like s&&t. Let the Japs own the small car market . . . we the big boys.
But wait! Big gas price = small cars: financial hell= no one buying any cars, big or small. Hey! I’ll climb in my private corporate jet, and beg for big bucks from uncle SAM, so I can keep my jet, and layoff workers! After all, uncle SAM is pretty stupid, ain’t he?
As I said yesterday, fire em all and bring in hard core Japanese CEOs to run the business. My guess is we’d see efficient, better built cars on the road in no time, and I’d pay to watch that happen.
If G.M. fails, Ford, apparently the strongest of the three, could wind up owning the U.S. truck market.
I heard on the radio this evening that the LOS ANGELES auto show now eclipses the Detroit show and that a number of innovations were on display – coming from auto makers other than Detroit.
Of course they’ll get bailed out, but they may have to work for it a little. It’s corporate blackmail…”If you don’t give us the money..all the auto workers will be laid off and whole families will lose their benefits and starve to death.”
BTW, now is a great time to buy stock in their companies..I think Ford is like $2 a share.
Forget Ford stock. Forget any of the big 3. With or without the bailout – they are doomed.
Think XOM. Lowest prices in ages. There is little doubt their products will continue to be in big demand, and only more so as time goes on.
I’ve heard some ideas about investing worker pension funds in the company as part of the bailout.
Allowing the workers to have an actual stake in the future of the company?
Not a bad idea. But the union should demand salary caps for the brass and NO golden parachutes. If the companies go down, the suits jump out the high windows or suffer right along with the workers.
Mary – I have to say i hope RoaCH is right – if we take over the companies we take ownership. And those stuffed shirt “crocks of sh*t” (their terminology) all get canned.
By the way – GM may have to divest itself of its “unrelated” auto/truck businesses because it is becoming a bank holding company (GMAC)
Oh and the corporate jets?
Sell ‘em.
When those guys go back to D. C. those jets better be on the market and they had better fly commercial, coach. In the information age, corporate jets and much of business travel is just a wasteful luxury.
Put the jets on Ebay, youbetcha.
Actually, I think what will happen is they’ll get the previously approved 25 bil. that was to be used to retool, to hold them over until after Obama and the new Senators come in. Then they’ll get the new money, with the previous strings attached.
“Allowing the workers to have an actual stake in the future of the company? Not a bad idea.”
Actually it’s a very bad idea. Most professional financial folks will advise you NOT to invest in your own companies stock as part of a 401K portfolio.
Further, at $2 bucks a share, I would not hang my reretirement on it.
Lastly, remember: Liberals did NOT like the stock market for our social security dollars. And for the same reason: It is not a good place to park all ones retirement planning.
One way to put Wichita’s economy further in the drink is to hope people don’t buy corporate aircraft.
But: It is O.K. for the American taxpayers to invest in the failing big three. Our dollars do not count to congress.
“In the information age, corporate jets and much of business travel is just a wasteful luxury.”
Really? Do you have any numbers to support that? From what I’ve read, the sales of small jets or corporate private jets is up worldwide.
And I’m sure they will listen to a seasoned poster from a small city in Kansas and consider your professional opinion and expertise in their decision making. (snort)
“One way to put Wichita’s economy further in the drink is to hope people don’t buy corporate aircraft.”
Actually? Local aviation, at least one company, focuses TOO much on corporate aircraft.
They build no small, affordable, piston planes at all and haven’t for many years. They abandoned that market and other manufacturers filled it.
The question being asked of the CEOs from the Big 3,
“Did you fly commercial to this meeting” (my paraphrase)
and
“if not, are you going to sell your private aircraft and fly commercial home” (my paraphrase)
should have also been asked of the ones doing the asking (Congress). They both are at fault.
Won’t be long before just about everything we buy is “assembled in America, Owned by….” Guess we won’t have to import as much that way.
“In the information age, corporate jets and much of business travel is just a wasteful luxury.”
cost of flying, hotel, food ext vs having a video conference
“Owned by….”
Guess you better kiss America good-bye.
Or pray, if that’s your personal thing.
Either way, socialism never worked. Government ownership of the banking and industrial industry is a sign of decay.
We are part of history now.
One way to put Wichita’s economy further in the drink is to hope people don’t buy corporate aircraft…..
Damn Linda. Don’t you know corporate jets are only a tool of the sinfully rich?
They most certainly should be banned.
Linda – perhaps we should be diversifying away from luxury aircraft. Our technologies could be used, for example, to build wind turbines. We should not be relying so much on a discretionary luxury.
Unchecked capitalism and Reaganism has proven to be an abject failure also.