Flying the Not-So-Friendly Skies: Chrysler asks court to cancel corporate jet leases
Late last year, Rick Wagoner, Bob Nardelli and Alan Mulally each climbed aboard their own company-provided private jets in lieu of commercial flight – or, alternatively, one of their company's own vehicles – to go before Congress and ask for a bailout. In the public eye, at least, that move was – to put it mildly – a mistake.
At least one chapter of the so-called JetGate scandal now appears set to come to a close. Chrysler has reportedly asked its bankruptcy judge to terminate the leases the automaker holds on its $38 million Gulfstream 450 and $55 million Gulfstream 550. Chrysler first leased the jets back in 2007 and subsequently took delivery on January 1, 2008.
A hearing on the issue has been set for June 3, but we wouldn't expect there to be any real holdup. After all, the debtor-in-possession financing that Chrysler received from the U.S. and Canadian governments stipulated that the automaker would give up all corporate aircraft.
[Source: Detroit News | Image: Gulfstream]
Reader Comments (Page 1 of 1)
Sea Urchin 11:40AM (5/14/2009)
Speaking of planes, this is what i read on Yahoo earlier today.
9. Execs, Families Fly in Style
But why drive when you can fly?
In 2006, Ford paid $517,560 so executive Mark Fields could fly to work in Michigan from his Florida home and back on weekends on the company's aircraft. Ford also covers the tax on this perk.
Ford also paid for the family of CEO Alan Mulally to fly between Michigan and Seattle, Wash. Ford will charter private aircraft for the CEO, and his family will be allowed to travel with him on trips. Ford will also pay for coach-class flights for Mulally's family when they travel at his request.
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blascrw 2:35PM (5/14/2009)
Well seeing as Ford has not taken any tax payer money "YET" what difference does it make?
taxes are paid on this perk whether buy Ford or the individual...
Frank 11:49AM (5/14/2009)
I guess this is good news. We don't want those evil execs flying private jets, right?
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Polly Prissy Pants 8:08PM (5/14/2009)
Yea, I thought these corporations saved money when their execs took private jets. Shouldn't they be leasing more jets, not less?
UCJR 11:55AM (5/14/2009)
This just in on DrudgeReport: "Chrysler, GM execs ordered to ride bicycles to work, citing 'shocking new developments in human transport systems powered by humans'"
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John 11:56AM (5/14/2009)
I don't have an issue with exec's using these jets as long as it's a business use and not pleasure travel.
We live in a world full of nut jobs and these fortune 500 executives are potential targets. I don't mind them taking extra steps to ensure security.
Besides, it's still not as bad as all the money wasted flying Air Force One over NYC for a photo shoot that could have been easily done with Photoshop.
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tump 12:56PM (5/14/2009)
Okay John, *YOU* pay for it then. I don't want my tax dollars going to some corporate in-flight bimbo that's only there to stir a flunkie CEO's drink, (which I also paid for.)
Sean 1:16PM (5/14/2009)
Hey, dumbass. That's you tump.
When they fly private jets, they don't spend three hours waiting in line and the terminal, another hour on the tarmac waiting to take off, don't have three connecting flights, and don't wait an hour for their luggage to come out.
They also have the entire flight to talk with their underlings and do work, something that would most definitely irritate the people seated around them on a commercial flight.
A private jet is cheaper for them in terms of both time and work.
The ONLY logical reason I have for not wanting them to fly private jets is that I am too poor to afford to do so myself and am therefore jealous that they can.
John 1:20PM (5/14/2009)
Dump - I do pay, way more than my fair share, certinally much more than you.
BOB 12:09PM (5/14/2009)
How about we just hang up the sign declaring America has gone Fascist and get it over with. Thinking our friendly Federal Government officials can run a car company is laughable. No one wastes more money than government, and now these same government clowns are going to run companies as large as GM and Chrysler? Both of these companies should have done the country a valuable service by just going bankrupt without taking any money from the Obama Bunch. We would all be better off in the long run.
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Ray 3:59PM (5/14/2009)
Exactly! And those same government 'officials' don't give up their perks during these hard times do they? Pot calling kettle black. There is no way in hell the government can say with a straight face they are going to turn these companies around. Never. They are going to put the final nail in the coffin of that industry. They can't even account for the money they've spent, made it law so that Berneke can't be held accountable for any misuse and abuse of the funds and have also made it illegal to audit the very entity that is creating all this money and debt, the Federal Reserve. Doesn't anyone think it should be law that the people controlling the very money you work so hard to earn be held accountable and audited on what they do with it?! Government will be the ultimate ruin of our economy. You watch. They've already started.
hoeun kim 12:18PM (5/14/2009)
Personally, i dont understand why people are so hostile against execs flying private.
One, whether they fly, drive, ride, or use a rocket, it doesn't concern anyone besides the people flying and the company. (obviously now that chrysler is in lines with Lada, Gaz, etc, in that they are good ole socialist gov products, the gov can tell them whats what).
Two, people seems to have a very skewed view of the rationale for private jets. The purpose is to get the execs to the place they need to go as soon as possible. Why do you want to make the guy you are paying $2500/hr ($5,000,000 annual salery divided into hourly figure) to sit at the airport and waste time? Execs need to get to places to conduct business in the morning and may need to come back for a board meeting in the afternoon.
Three, for those who say why cant they just use web conferencing/teleconferencing, it just isnt the same. If you are pitching an idea, its much much easier to do it in person rather than do so electronically. Whether it's a firm hand shake, or eye contact and overall demeanor during presentation, there are personal connections that the technological solutions just can not provide.
Why don't we all take hand at keeping government intervention out in private sector of this country and stopping vilification of all execs out there. Whether they actually put in effort to get to where they are, or just parachuted in, they had to hustle to get to where they are. Stop the bashing of execs just because you dont have the hustle. Stop the socialistic trend that is building up this country!!!
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Sea Urchin 12:37PM (5/14/2009)
The issue is not planes. The issue is that you should not be flying while you are on welfare, as many companies are right now.
I don't think anyone cares if Balmer or Jobs fly private jets, because they are not on welfare as GM, Chrysler, Merrill and others are.
hoeun kim 1:04PM (5/14/2009)
while the companies that took gov money should be much more reserved in using items such as private jets, there are business to be done. And it is the matter of efficiency. If the exec flying private lands a big contract, or a deal, then yes, whether they took gov money or not, it shouldnt be questioned. If they were flying around without much productivity, then it is a huge waste of resources and should be prohibited whether they took government money or not.
It is the matter of doing the business. Sometimes you have spend money to make money. You cant just cut costs of doing business and expect to do well. And if the execs think other wise, then they are walking down the path of destruction even without gov intervention.
I just think it is comical that people think gov involvement in private sector is beneficial to the overall well-being of the country. Since when did government know the best?? Last time i checked, heavy government involvement does more harm than good. Let the natural selection take its place. It has worked for all history without bureaucratic involvement. Let the mismanaged companies die, and allow the well managed companies rise above. Yes, thousands of people will lose the jobs, but unfortunately, that is the product of mismanagement. At least the whole foundation which our society is built on, which we have fought so hard to protect throughout history wont be ignored. The foundation of credit between businesses are falling apart. How can we call the government forcing the investors to take less money than what is owed in any way capitalism?? Is that what we stand for? Government forcing us to do what ever they think they know is best?? Please.
Government has no idea what its doing. Just look at what has happened in this economic crisis.... why did we bail out chrysler and gm, knowing that they were going to go bankrupt?? any business 101 student would tell you that the profit model that were in practice at those companies just wasnt sustainable.
Yet, government decided that they know how to spend your money better than you. I dont know a single person that would agree with that statement; why are we letting someone else spend our money, when they have no idea what the hell that they are doing??
I know, this rant has gone on for too long, and it isnt even much of a argument with Sea Urchin, but something that i had in my mind for a while.
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Chris 4:35PM (5/14/2009)
How are they going to show up to Congressional questioning in DC?
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BOB 4:45PM (5/14/2009)
Too bad we don't have a Howard Hughes these days. I suspect Howard would tell
Congress to stick it where the sun doesn't shine.
Level 6:56PM (5/14/2009)
With GM and Chrysler At least I see where the money went, it went to those companies to keep their employees employed just a bit longer..I have no problem with that. Its just another form of "welfare". Now the majority people a that are on actual welfare are a sorry bunch of bitches tooo lazy to work keep getting pregnant to keep collecting more checks and have their housing paid. As far as the government goes they are a bunch of pork spending pigs hypocrites!.....
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Avinash machado 1:49AM (5/15/2009)
Octomom?
Avinash machado 1:48AM (5/15/2009)
Does Pelosi not fly on a Jet from DC to her home state California often?
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