GM, Ford CEOs Go Begging - in Private Jets
November 19, 2008 11:54 AM ET
If you're planning to beg Uncle Sam for $25 billion, it might be smart to brush up on your poor-boy act first.
The CEOs of General Motors (GM), Ford (F) and Chrysler overlooked this basic fact when they flew to Washington in private jets to testify before Congress.
"We want to continue the vital role we've played for Americans for the past 100 years, but we can't do it alone," GM's CEO Rick Wagoner told the Senate Banking Committee.
Tom Schatz, president of a watchdog group called Citizens Against Government Waste, huffed: "This is a slap in the face of taxpayers. To come to Washington on a corporate jet and asking for a handout is outrageous."
You'd think that insight would rate a "Well, duh" - but apparently not from the auto industry's top dogs.
Wagoner's trip to Washington in a G4 private jet cost his struggling company an estimated $20,000 roundtrip. A commercial flight booked online would have cost about $576 for coach and $1,674 first class round trip.
Sure, sure - a CEO's time is more valuable than gold, but there are cell phones and e-mail to keep in touch with the galley slaves back in Detroit – and electronic gizmos work on commercial flights and even in airport terminals or taxis.
Ford CEO Alan Mulally's $28 million pay package includes the use of a private jet. He lives in Seattle and the company jet zips him home on weekends, ABC News reports.
You'd think avoiding the "let 'em eat cake" trap would be Public Relations 101. But maybe the auto industry CEOs are so accustomed to their perk-filled nether world that they simply don't understand how a little thing like flying on a private jet to ask for a handout looks to the working stiffs of America.
The CEOs at Detroit's (formerly) Big-3 automakers could benefit from a lesson in PR smarts from Goldman Sachs (GS).
Seven top Goldie executives, including CEO Lloyd Blankfein, are giving up their bonuses for 2008. It's a move that's sure to keep the press, members of Congress and other pests off their backs after participating in Uncle Sam's $700 billion bailout plan.
That creates the appearance of shared sacrifice - and here's betting that life goes on if you forgo a private jet and take a commercial flight.
Perhaps the auto industry takes its cues from Lloyds TSB (LYG), which plans to spend an estimated £2.5 million, or about $3.7 million, on Christmas parties for its staff after pocketing a hefty £5.5 billion government handout.
Or AIG (AIG), another company that's benefited from Uncle Sam's handouts. In a brilliant move sure to win the hearts and minds of Joe and Jane Sixpacks everywhere, AIG officials spent $440,000 on a retreat at the St. Regis Monarch Beach Resort in Southern California after pocketing a taxpayer-backed bailout. Four AIG top dogs followed up by traveling to England to go partridge hunting. The cost: A mere $87,000.
Can the auto industry's top execs top that?
Well, they're off to a flying start.