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Financial Glossary

CEOs Flew Private Jets to Ask for Bailout

By Josh Levs

CNN

posted: 48 DAYS 16 HOURS AGO

comments: 1822

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(Nov. 20) - Some lawmakers lashed out at the CEOs of the Big Three auto companies Wednesday for flying private jets to Washington to request taxpayer bailout money.

Gerald Herbert, AP

From left, GM CEO Richard Wagoner, Chrysler's Robert Nardelli, Alan Mulally of Ford and Ron Gettelfinger of the United Auto Workers testify on Capitol Hill on Wednesday.

"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.

"It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious."

He added, "couldn't you all have downgraded to first class or jet-pooled or something to get here? It would have at least sent a message that you do get it."

The executives -- Alan Mulally of Ford, Robert Nardelli of Chrysler and Richard Wagoner of GM -- were seeking support for a $25 billion loan package. Later Wednesday, Senate Majority Leader Harry Reid reversed plans to hold a test vote on the measure.

An aide told CNN that Reid decided to cancel the test vote when it became clear the measure would fall well short of the 60 votes needed. Reid did, however, make a procedural move that could allow a vote on a compromise, which several senators from auto-producing states were feverishly trying to craft.

At Wednesday's hearing, Rep. Brad Sherman, D-California, pressed the private-jet issue, asking the three CEOs to "raise their hand if they flew here commercial."

"Let the record show, no hands went up," Sherman said. "Second, I'm going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up."

The executives did not specifically respond to those remarks. In their testimony, they said they are streamlining business operations in general. Watch Nardelli ask for help »

When contacted by CNN, the three auto companies defended the CEOs' travel as standard procedure.

Like many other major corporations, all three have policies requiring their CEOs to travel in private jets for safety reasons.

"Making a big to-do about this when issues vital to the jobs of millions of Americans are being discussed in Washington is diverting attention away from a critical debate that will determine the future health of the auto industry and the American economy," GM spokesman Tom Wilkinson said in a statement.

Chrysler spokeswoman Lori McTavish said in a statement, "while always being mindful of company costs, all business travel requires the highest standard of safety for all employees."

Ford spokeswoman Kelli Felker pointed to the company's travel policy and did not provide a statement elaborating.

But those statements did little to mollify the critics.

"If it is simply the company's money at stake, then only the shareholders can be upset or feel as it might be excessive," said Thomas Schatz, president of the watchdog group Citizens Against Government Waste.

But in this case, he said, "it's outrageous."

"They're coming to Washington to beg the taxpayers to help them. It's unseemly to be running around on a $20,000 flight versus a $500 round trip," Schatz added.

The companies did not disclose how much the flights cost.

Analysts contacted by CNN noted that the prices vary with the size of the plane and the crew, and whether the aircraft is leased or owned by the company.

Analyst Richard Aboulafia of the Teal Group said that $20,000 is a legitimate ballpark figure for a round trip corporate jet flight between Detroit, Michigan, and Washington. iReport.com: Share your thoughts on the 'Big Three' bailout

When asked whether they plan to change their travel policies as part of the restructuring needed to shore up their finances, none of the companies answered directly. But they said they have cut back on travel in general as revenues have fallen.

2008-11-20 07:13:30

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1822 comments

Mucho grit 06:11:15 AM Dec 09 2008

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Sometimes it really upsets me when people only "see" what they want to see and not look at the whole picture. First, if anyone of you had a private jet to fly you would do so without expecting redicule. GM's had 5 jets, they sold 3 to help their situation. They kept the 2 they had they were paid for and used them to get to Washington.... dahhhh... It was cheaper than a private airline, now they are being slammed because this time they ALL drove hybrids. Then you all do not realize that if the UAW goes down, for every auto worker that looses a job, NINE other people do too from the suppliers etc etc etc. This country is in grave danger of a depression, do our Politicians curtail THEIR spending. NOT.

Tsegeberg 12:18:04 AM Dec 09 2008

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Nardelli should take the money he received in bonus after destroying Home Depot to help restore Chrysler.

Jangnewt 09:00:43 PM Dec 08 2008

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The Big 3 ought to take lessons from Hundai, Honda, Subaru and Toyota. Instead, they continue on their greedy way and EXPECT us all to give them their Golden Parachute! Why do we continue to fund those who don't give a damn about the public?

BBROWN7162 08:56:53 PM Dec 08 2008

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having either the stupidity or the arrogance to fly in private jets to beg for money from the government tells me that these people are not able to manage huge companies that are responsible to and for thousands of people in their employ. a huge shake-up CEO's is certainly in order.bb

Kpnalma 07:55:01 PM Dec 08 2008

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lord help us all greed greed god is in control it is in the bible

BPaluch777 07:46:46 PM Dec 08 2008

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Why didn't the text of my post appear???

BPaluch777 07:45:29 PM Dec 08 2008

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Why aren't the flapping jaws of politicians and media types raising holy hell about Pelosi flying her *** in a government paid 50 seat jet to California from DC? HMMMMMM?

Lllmmmccc42 09:39:33 AM Dec 03 2008

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I'd like to know.....if any "union workers"....took a pay cut...knowing their livlihood is in jeparody. In the very least.....stop with all the over-time

Lllmmmccc42 09:36:41 AM Dec 03 2008

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Unions.....have cannabalized themselves...and that folks....is one of the biggest problems. Someone doesnt need/deserve to make $70.00 an hour....sticking a tire on a car. Its up there with tenure...even if I do my job poorly...I still get to keep it...Work ethic in this country...is dead

Dad4410 04:14:04 PM Dec 01 2008

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the real problem along with the exs is the union drugies ,working half the time and drawing 96% of there pay and bragging aboutit!!!!!!!!!!!!

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