Private jets out at GM, Ford
posted at 4:25 pm on December 2, 2008 by Ed Morrissey
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Maybe they did get the message, or at least the most obvious part of it. GM and Ford have announced that they will sell off their corporate jets and fly commercial while begging for taxpayer bailouts:
Ford and General Motors will sell their fleet of corporate luxury jets, the two struggling auto companies announced today.
The move comes two weeks after ABC News revealed Ford CEO Alan Mulally, GM CEO Rick Wagoner and Chrysler CEO Robert Nardelli traveled to Washington in private jets to plead poverty and ask Congress for $25 billion in taxpayer money. …
In a statement, GM said, “Due to significant cutbacks over the past months, GM travel volume no longer justified a dedicated corporate aircraft operation.”
“We don’t use them much anyway,” said GM spokesperson Mike Meyerand. “It saves us a lot of money to get out of this business,” he said.
Ford also confirmed that it has decided to sell its five corporate aircraft.
We don’t use them much anyway. They only used them to get back and forth to church on Sundays, and to panhandle on Capitol Hill during the week?
Now they’re not only not flying private, they’re not flying at all. Now they’ll drive from Detroit to DC in enviro-friendly cars that they want Congress to subsidize:
The plan Ford is presenting to Congress this week also says it will cancel all management employees’ 2009 bonuses and will not pay any merit increases for its North American salaried employees next year. Mulally said in an interview Tuesday that Ford will emphasize its cost cutting efforts with the United Auto Workers union and will give much more detail to Congress than it did during a visit earlier this month. The company also will accelerate plans to roll out electric cars as part of the plan it will present to Congress this week. Mulally says Ford has said it has enough cash to make it through 2009 and may not need government help.
Top executives at the Big Three U.S. automakers are returning to Congress for hearings on Thursday and Friday. They are seeking the bailout loans to help them through the recession and the worst sales downturn in 25 years. A GM spokesman says Chief Executive Rick Wagoner will travel to Washington, D.C., by car instead of flying a commercial airline or corporate jet.
Hope their AAA memberships are fully paid up.
How will Alan Mulally get to work now? He lives in Seattle and got a private-jet commute every weekend from Detroit back home. Mulally says he’ll work for a dollar a year while receiving taxpayer funding for Ford’s operations, and that won’t even pay for a standby coach-class ticket. I suspect the benefits package will remain in place, complete with first-class accommodations.
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What does that mean?
I want some concrete details on what the unions are going to sacrifice as well. Management is only a part of the problem. Have there been any statements from union reps about this situation? Do they acknowledge that they need to compromise as well?
redshirt on December 2, 2008 at 4:31 PM
Oh F F S
LimeyGeek on December 2, 2008 at 4:31 PM
Smart move. If you want people on the city street to put cash in your cup, you don’t show up in a three piece suit. You grab a handful of dirt and rub it into your cheek, rip a hole in your pants, and blacken your teeth a little. NOW you’re ready for handouts.
justfinethanks on December 2, 2008 at 4:31 PM
Good. Now take the money, and stop crying for bailouts. You know, I’ll bet there’s easily 30 billion in waste they could sell off.
MadisonConservative on December 2, 2008 at 4:32 PM
They need to go bankrupt
Walk through the fire and salvation shall be your reward!
LimeyGeek on December 2, 2008 at 4:33 PM
Maybe he’ll telecommute?
acat on December 2, 2008 at 4:33 PM
How about dumping half your executive staff as well as selling off your private jets and THEN tell the Unions to go screw themselves and move into a lower based, decent wage corporate mode… minus the “executive” bonuses as well.
upinak on December 2, 2008 at 4:34 PM
Seems like such a small gesture, compared to what they’re asking for. But, given how much Congress is in to appearances…
kc8ukw on December 2, 2008 at 4:36 PM
Uh, then why are they asking for $9 billion?
CP on December 2, 2008 at 4:38 PM
GM Sales down 44% from this time last year, Ford down 30%
Why are we supposed to give them money again?
lodge on December 2, 2008 at 4:38 PM
Yep. I’ve never been a union member, but I can’t see how they don’t realize that, so often, they shoot themselves in the foot via the long term troubles they cause the companies they work for.
kc8ukw on December 2, 2008 at 4:44 PM
Isn’t it too late for all this?
jay12 on December 2, 2008 at 4:44 PM
Hilarious — Good luck with that!!
fiscallyconservative on December 2, 2008 at 4:46 PM
Toyota is down 33.8% and Lexus 34.7% from last year, even thought they extended their 0% financing and had some redesigned models this year. I think we can safely say that the auto industry is contracting in general.
davymark8 on December 2, 2008 at 4:46 PM
+1. Actually, make that +1000
fiscallyconservative on December 2, 2008 at 4:47 PM
Or screw over the workers by raising dues and medical costs.
Unions suck.
upinak on December 2, 2008 at 4:47 PM
I know that this can be a little difficult, but it would be nice if more people could actually understand what is going on here.
The linked page, has a link to this in the second paragraph. From there, the first paragraph links to this story that has this as the second paragraph:
A Loan =/= free money when it has to be repaid. By this same logic, my mortgage was a gift, because the mortgage company ‘gave me money.’
Honestly people, this is not a gift. This is not free money. This is a loan. Be honest here. Call it what it is: a loan.
wise_man on December 2, 2008 at 4:51 PM
What a freaking joke. Guys who have been paid many millions to sit atop a sinking ship now say they will forgo another raping of the company (for one year) in order to get taxpayers to bail out the companies they ruined. Beautiful.
Oh, and I couldn’t really care less what the freaking CEO makes. It’s what the union guys being paid NOT TO WORK, and the retirees living high on the hog, thanks to the UAW that matters.
Sugar Land on December 2, 2008 at 4:51 PM
Yeah, I gave up my private jet, too–what with the economy being the way it is and all, I pretty much had to or I’d have trouble buying food. Most of the other teachers I know are doing the same, unless they’re married and have two incomes that can afford hangar rental, maintenance, and jet fuel.
I guess the fat cat days we teachers have come to enjoy on the taxpayer nickel have come to an end, eh?
/
Bob's Kid on December 2, 2008 at 4:52 PM
thomasaur on December 2, 2008 at 4:53 PM
I am truly amazed that congressional ass-hats can show their faces in public, after demanding that the executives take a salary trimming for poor performance and cost cutting measures!
The misfits in congress should lead by example for poor performance. They should be paying us to let them stay where they are, instead of us paying them their bloated salaries and benefits!
They need to take a salary haircut, like with a guillotine.
belad on December 2, 2008 at 4:55 PM
Gee guys…sniping is really easy, you know. And free. But totally unproductive.
I’d call this a “good start”. They screwed up their first attempt, and that was good for laughs and a well-deserved DLTDHYOTWO. But they seemed to have learned that lesson quickly. If only Detroit learned all lessons this quickly.
If they are willing to begin making these hard decisions, then I’m willing to begin considering their case. I’m still skeptical, and very anti-union myself. But perhaps this move will be contagious, and the unions will start to consider difficult decisions themselves. I’m very skeptical, but I think it’s the UAW’s move now…before the governement gives any more encouragement at all.
connertown on December 2, 2008 at 4:57 PM
…which, if they can’t pay back, they just get another “loan” for next time, just like they did this time, because the American auto industry must be saved at ANY cost.
Loan. Right.
MadisonConservative on December 2, 2008 at 4:59 PM
What do you call a loan they have no possibility of paying back?
lodge on December 2, 2008 at 5:02 PM
Who says that they are not going to pay it back?
wise_man on December 2, 2008 at 5:02 PM
a gift with interest.
upinak on December 2, 2008 at 5:03 PM
And to whom, pray tell, are they going to sell those private jets? I suggest the airlines. After the economic apocalypse hits, the number of people still flying will fit into a Gulfstream.
keep the change on December 2, 2008 at 5:08 PM
Look at their balance sheet, dude.
lodge on December 2, 2008 at 5:10 PM
And six months down the road, after they get their hand outs, and no one’s paying attention…They’ll get their toys outta hock, and it’ll be business as usual.
And 10 (5?) years down the road, they’ll be right back where they are now…begging the FED to save their greedy, sorry asses.
BigWyo on December 2, 2008 at 5:12 PM
Back in September of 79, I’m sure that others also falsely claimed that Chrysler had not possibility of paying back it’s loan.
So, besides being a internet nostradamus, do you have anything else to back your opinion up with fact, madison conservative?
wise_man on December 2, 2008 at 5:13 PM
Nobody loans money to an organization that loses 10 billion a year and pays people to watch TV and play cards. Except our genius congress. It’s no loan but a nice guilded coffin for the funeral next year.
hanzblinx on December 2, 2008 at 5:13 PM
Re: “balance sheet, dude.”
That’s why they are asking for a loan.
wise_man on December 2, 2008 at 5:17 PM
Getting rid of the planes was a great idea…like anyone will remember they had them right? Seriously. We have a homeless guy that hangs out at our eastside store sometimes. He came up to me a few weeks ago; told me he was really hungry and could I give him five dollars. I told him I probably would have given him five dollars if he hadn’t had a beer in his hand when he was asking me for food money. Image is everything.
Speaking of internet nostrodomuses (or is it nostrodomi) did McCain win the election, whizzman? Oh, that’s right. He lost. So what are you doing here? You struck me as being one of the higher ranking lickspittles, judging from the shamelessness of the bullsh*t you spun for McCain..I would think he would have you gearing up for the big Amnesty 2.0 push coming next year. Don’t you have you some talking points, or some area of McCain’s anatomy to polish?
austinnelly on December 2, 2008 at 5:22 PM
Chrysler came into a bull market that began in 1980. GM has a burn rate of 3bn/month and is coming into a major recession when no-one has credit to buy cars. There’s a huge difference.
lodge on December 2, 2008 at 5:22 PM
The question is, why are the companies going to the Fed instead of the bank down the street for these loans.
Answer. Because the banks wanted to charge more in interest than the companies wanted to pay. You can bet the mortgage that the “interest” rate that these companies pay will be way, way, below market. And there is a good bet that in a few years, the feds will write off at least a portion of these loans to boot.
MarkTheGreat on December 2, 2008 at 5:24 PM
The patheticness in this whole thing is ridiculous. Just don’t give them a damn bailout in the first place. The treatment of capitalism by big corporations and the Government is sad.
Dritanian on December 2, 2008 at 5:25 PM
F * ck you,.
wise_man on December 2, 2008 at 5:27 PM
What a frugal bunch, now I feel so much better about the bailout.
Done That on December 2, 2008 at 5:30 PM
Here is a quote from detnews from a UAW jobs bank worker:
“We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper,” he says. “Otherwise, I’ve just sat.”
If that doesn’t chill your bones nothing will.
hanzblinx on December 2, 2008 at 5:34 PM
OK, so the execs will pander to congress’ specific commands and not fly to DC, as well as agreeing to the unwritten rule that congress can now set salaried employees wages. Sounds like capitalism to me.
Vashta.Nerada on December 2, 2008 at 5:41 PM
Ed,
You have been away from corporate life too long. If any of these guys go to a $1/yr they can still fly back home every weekend on the corporate dime. Big companies like this have what is called an executive expense account. They charge it on the corporate card first class, or if they are really smart they do a standby on a shared lease private jet. Its billed out just like a commerical liner.
Lest us not be fooled.
Dr. Dog on December 2, 2008 at 5:49 PM
Finally, someone displays a little sense around here. So many members of the commentariat sound like members of Congress — “oooh, let those wasteful companies that built gas-guzzlers die!” — without understanding a few key points:
The government — including more than a few of the bozos now calling for Detroit to go BK are, thanks to endless laws and regulations, a major reason for the car-makers’ woes, just was they were/are in the banking charlie-foxtrot;
People — including some here — wanted big SUVs, at least until gas went sky-high. Then they expected Detroit to have some magic alternative (defying the state-of-the-art in technology and the laws of physics) ready overnight;
Banks — the ones who got the no-questions-asked handouts, remember? — have gotten shy about making car loans. Not enough people have $30K or more in hand to go out and buy;
Finally, while the Congress is having a good time braying about knowing more about the car industry than those who work in it, it is also getting ready to give Osama Obama a cool $500 billion more to spread among his chosen buddies. Ford’s request for $9 billion sounds pretty damn puny beside that.
Those who helped elect Obama by being such doctrinaire hardasses that they couldn’t support McCain now get a chance to help torpedo one of America’s last productive industries by doing the same thing. You guys going to be happy when the Big Three fall?
MrScribbler on December 2, 2008 at 5:53 PM
They refuse to see that despite all the execs are getting bailed out, joe six pack vastly outnumbers the execs. So all the customers will be broke and won’t be buying anything so the problem won’t be fixed. Its just gonna be worse.
gringo69 on December 2, 2008 at 5:58 PM
I’m really getting a kick out of Nancy Pelosi discussing how Congress is going to examine the business models being proposed for the auto companies. That’s just what we need, morons from Congress thinking that they can run businesses – micromanage, even. I wonder if Congress noticed the news on their new visitor center and how much of a total f#ck up that was. Budgeted at 265 million. Done for 621 million. Yeah, those are the folks who are going to straighten out the auto companies … right after they pass some new, idiotic eco laws that drive the auto companies even deeper into the ground. Is government supposed to provide comic relief?
progressoverpeace on December 2, 2008 at 6:08 PM
Re: “balance sheet, dude.”
That’s why they are asking for a loan.
wise_man on December 2, 2008 at 5:17 PM
—–
I call it a bad business model, and one they need to show they understand is broken!
Lessee, they pay these union guys to sit on their asses, and make shoddy product compared to our competition to encourage people to come back more often!
This would be like little Timmy splitting his lemonade stand take with his sister, who just sits there, meanwhile putting salt in the lemonade to make his clients thirsty again faster.
This may have worked when Toyotas were funny looking and it was hard to find a mechanic to fix one. It does NOT work when my Toyota Tundra can out-do a Ford F-150 hands-down all day every day. And it was built in the U.S. of A. What’s not to love?
That said, all the UAW have to do is wait until Jan. 21st, and the Dems will give Ford, GM, Chrysler et al whatever they want to keep the voters bought.
We’re screwed. But at least my Tundra is paid for, so worst case I can live in it.
Mew
acat on December 2, 2008 at 6:16 PM
I guess that’s all we can expect to get out of seeing our money going down the porcelain exit….
MrScribbler on December 2, 2008 at 6:17 PM
Just turn the auto industry over to congress; Reid and Pelosi can set up an oversight committee, and show us how it should be done. Put the UAW on the federal payroll to build cars designed by congress and the earth first crowd.
It worked real well for airline baggage inspectors, right?
After about ten years, or so. Well see some real progress.
(I really don’t care anymore. They’re gonna do what they’re gonna do and nobody’sgonna stop’m. )
Skandia Recluse on December 2, 2008 at 6:39 PM
If the government gives them a bailout I will NEVER buy another American made car.
REASON: I would pay the car off in 4 yrs and my children and grandchildren will pay for that car for the rest of their lives!
Save us all the cost– GO BANKRUPT!!
Bicyea on December 2, 2008 at 6:44 PM
Meanwhile, Cpmrade Pelosi flies around in her taxpayer paid for 757 — She doesn’t seem to get it does she?
tarpon on December 2, 2008 at 6:55 PM
You seem to miss the point. Why are the taxpayers being saddled with an enormous bill on the promise of a bunch of bumbling bozos that they will do a better job if they can get a helping hand from the cookie jar.
The executives’ salaries, when compared to the magnitude of the problem, is like a snow flake falling into the Pacific Ocean. What needs to happen is to allow the normal mechanism for troubled companies, Chapter 11 bankruptcy. The BK court, creditors and company executives get to determine the ‘Plan’ to exit out of Ch. 11 or they determine that solvency is a ‘non-starter’ and go into Ch. 7. Maybe some consolidation wouldn’t hurt. In Chapter 11 the Bk court and the trustee monitor the progress toward solvency and keep the executives honest. The problem with letting congress dictate terms, is that there is a ‘third rail’ here, the UAW. In Chapter 11 the UAW becomes one of the lessor players, kind of like one of the creditors and they will have to take a number. It could be that the UAW might have to enter Chapter 11 if F, GM and Chry aren’t required to make those payments to have people sitting at home or where ever they are, but not on the job making cars that no one wants.
The US auto industry, AKA – Ford, GM and Chrysler, needs to change the way it does business and doesn’t need to be coerced into making politically correct cars that people will still not buy.
belad on December 2, 2008 at 7:06 PM
Congresspeople showcasing their micro-’management’ of the auto companies takes arrogance to a new height, and it’s thoroughly disgusting. Congress is no more competent to regulate a car company than J. Fred Muggs.
petefrt on December 2, 2008 at 8:16 PM
I am correcting an inaccuracy, belad. It’s not missing the point to say that this is not a gift that is being proposed. It’s a loan, And a loan needs to be paid back.
wise_man on December 2, 2008 at 9:39 PM
Palin: ditching corporate jets before it was all the rage.
angelat0763 on December 2, 2008 at 11:08 PM
Alternative money-saving strategy.
Shy Guy on December 3, 2008 at 1:50 AM
More substantive commentary. Good to see you’re maintaining your usual standard.
MadisonConservative on December 3, 2008 at 11:45 AM
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