That's a red herring. Corporate executives' time is too valuable to be spent waiting for scheduled commercial flights. Security is also a concern.

After 9/11, many insurers told companies' CEOs they could no longer fly on scheduled airlines. This is because Raytheon lost their four top officials when their commercial flight was flown into the World Trade Center.

↓↑report

Yes, his time is so very valuable. It takes a considerable time investment to run a company into the ground.

↓↑report

i wish w/ the bailout, GM would be given additional assets to simply buy out chrysler. i mean, seriously...how do you face bankruptcy twice in the course of about 30 years.

↓↑report

Sir,

I could not have said it any better.

So please, correct me if I am wrong. This guy takes over a company, it starts to sink quicker than the Titanic, and after he's pocketed a nice salary. not to mention some nice benefits, he wants to show his compassion by accepting a $1.00 salary. This guy's heart is as big as Mother Teresa's. No dice Mcfly.
They should have given all of that up MONTHS ago to really show they have the best interests of their companies and their shareholders in mind. Besides I don't even think 7 billion would even save Chrysler. Of all the big three, they seem the most likely to get flushed down the toilet.

↓↑report

Didn't he do the same to Home Depot as well (run it into the ground that is)?

↓↑report

When Nardelli was at the helm, he watched Home Depot submit a huge chunk of it's market share and allowed Lowe's to emerge as a strong competitor.

And then when he left, he was given $220 million for his work. I don't see why Chrysler hired him to begin with. I think a kid who just graduated from the Wharton School of Business would've been a better choice.

↓↑report

I thought cars were just like hammers? They hire a guy who was over paid from his last job too. I think GM has a good car guy but is over his head as a CEO and Ford has a great CEO who knows nothing about cars and Chrysler has a guy as dumb as a hammer...

↓↑report

"All three CEOs - Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler - exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM’s $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone."

"The price of a coach ticket between Detroit and DC goes for $288 on a non-stop Northwest flight. Granted, one has to fly Northwest, but Wagoner could have improved the experience by spending an extra $600 on a first-class ticket. Instead of spending $900, Wagoner instead burned through $20,000 — the cost of the single flight on the private jet."

"None of the automakers have plans to shelve their fleets. In fact, they’ve already called their private jets “non-negotiable” at the same time they’re demanding that taxpayers pay the bills for their extravagance. "

"Alan Mulally hasn’t flown commercial since beginning his stint at Ford. He refused to relocate to Michigan from Detroit, so his contract with Ford includes the unlimited use of a private jet. He commutes every weekend from Seattle to Detroit for his job. "



There IS excess fat to be trimmed.

↓↑report

The reason these companies have failed has nothing to do with how often executives fly on private jets and everything to do with them just being unable to orient their companies to survive a worst case economic crisis. While $20mm seems like a lot, it's nothing compared to a company that loses a billion a month. They've had decades to prepare for consumer spending habits to change and have ignored it, while the Japanese auto makers have profited and built up rainy day funds.

↓↑report

Skant... there are reasons that some manufacturers *cough*toyota*cough* have such a large rainy day fund.... and its not market forces.

The question remains, how much government interference in industry is acceptable.

And lets put it this way... yesterday alone, between fords 3 executive jets, Ford spent more on private flights in one day than I will earn this year working in the financial industry and having a second job at $13/hr. I make ~65k per year. Ford spent a year's salary for a white collar worker (or a UAW worker) on three flights in one day. It is senseless to state that flights are not the issue. Excess and bad choices are the issue, and the executives spent 20 times more than needed to get to their destination in luxurious comfort.

↓↑report

I am not going to point fingers at Ford at this point. Stupid GM and Chrysler are the ones that should be on their knees begging, while Ford needs to sit and look teary-eyed in hopes that the other two won't drag them into a BK. Mullaly can keep his $, as I think he is (or was) doing his job turning Ford around.

↓↑report

What you are leaving out of your math is the fact that these companies can't simply run their cash reserves to 0. They all have a minimum amount of cash on hand they have to have in order to stay open and keep the factories running. If I remember right for GM it was around $10 billion.

Ford is a good investment for anyone at it's current stock price so why wouldn't the government buy up some stock. They were making a profit earlier in the year before the market imploded and they have the products in the pipeline plants being retooled and real vehicles about to hit the road that will sell. That said the big brass at Ford should be taking a paycut and they need to make cuts. If you end up needing Big Daddy Feds to bail you out you deserve some punishment.

GM is still the biggest of the three despite a history for horrible cars. The GM brand has a huge amount of value. Now they actually have a few cars that are great vehicles and the promise of the Cruze and the Volt down the road. Unfortunately they haven't made money in 4 years! This company has too many brands, dealers and too much overhead and a management team with their heads in the sand. GM could take this money and emerge with a profitable Chevrolet and Cadillac but they don't have the resources to go around to support products for so many other divisions. GM can be turned around but if the government is going to spend tax payers money to do it they need to insist on the fat being trimmed. The reality of the situation is bankruptcy is the only way they are going to have the freedom to really trim brands and dealers without spending a fortune.

Cerbyler is a big question mark. Being a private company we really don't get access to their real books and so I don't see how they could get tax money. They don't appear to have that much product wise in the pipeline other than a rebadged Nissan and with Cerberus trying to hawk the company to anyone who will talk to them I don't see a management team or ownership in place that is commited to a turnaround. If Cerberus isn't willing to bet their money on Chrysler's future then why should the tax payer.

↓↑report

Great article, thanks for the link.

↓↑report