Private Jets
You would think that if car company executives wanted to take private jets to DC they could at least share a single private jet rather than going in three separate private jets:
Wagoner’s private jet trip to Washington cost his ailing company an estimated $20,000 roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class.
After the hearing, Wagoner declined to answer questions about his travel.
Ford CEO Mulally’s corporate jet is a perk included for both he and his wife as part of his employment contract along with a $28 million salary last year. Mulally actually lives in Seattle, not Detroit. The company jet takes him home and back on weekends.
Meanwhile, conservatives are outraged that unionized workers get pensions.
72 Responses to “Private Jets”
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November 19th, 2008 at 11:16 am
“Ford CEO Mulally’s corporate jet is a perk included for both he and his wife as part of his employment contract along with a $28 million salary last year.”
Has the accusative case for personal pronouns been recently banned? The other day I heard the president-elect say “The president and first lady have invited Michelle and I to the White House…”
November 19th, 2008 at 11:19 am
So besides having to fire all the CEOs when we bailout the companies, the whole PR department needs to be shot.
Boy, how can you be this stupid. Seriously.
November 19th, 2008 at 11:23 am
It’s a measure of how insulated these CEOs are from reality that they don’t realize how bad this looks. I mean, flying to D.C. in corporate jets and then begging for taxpayer money? Are these guys really that freaking dumb?
November 19th, 2008 at 11:27 am
…flying to D.C. in corporate jets and then begging for taxpayer money? Are these guys really that freaking dumb?
Yeah. It’s almost like…I don’t know, a senator of one party campaigning openly for the opposing party’s presidential candidate, and then expecting not to be punished for it. How stupid can these guys get?
November 19th, 2008 at 11:30 am
there are lots of reasons to dislike bill gates, but he continued to fly coach long after he became one of america’s most wealthy.
matthew had a post the other day in which he cited megan mccardle on CEOs; i couldn’t bear the thought of participating in a discussion launched by a mccardle remark, but here we have an example of what i would have written had i felt a serious person was making the remarks matthew cited: the skill set of most CEOs consists of knowing how to advance on the corporate latter.
and once having advanced, the next skill set is to take advantage of their position for maximal personal gain.
sometimes, by random chance, this gets someone in the ceo position who can also be an effective leader, but generally, it produces people who think they should fly on private jets to beg for a taxpayer bailout….
November 19th, 2008 at 11:30 am
er, corporate ladder!
November 19th, 2008 at 11:34 am
I’m largely pro-bailout (under certain conditions), but stories like this make it very, very difficult.
November 19th, 2008 at 11:39 am
“Meanwhile, conservatives are outraged that unionized workers get pensions.”
And it’s trust-fund scumbags like Yglesias who are outraged that unionized workers might get pensions. Note how stridently Yglesias preaches that the industry must go into Chapter 11.
Why does someone like Yglesias who parrots right-wing talking points during every crisis work at CAP?
November 19th, 2008 at 11:42 am
Anyplace I’ve ever worked the people at the top have been totally out of touch with what is really happening in the company, no matter how smart they are. The very nature of their position at the top of many layers of bureaucracy insulates them from reality. They never talk to anybody who has problems meeting their own expenses, or would have to drive themselves to a meeting. Live like that for years and years and you lose perspective. Everyone in their circle flies around on private jets, so that’s what they do. They’d be too embarrassed to fly with the unwashed masses.
November 19th, 2008 at 11:46 am
Seriously, is Yglesias working for Mitch McConnell now?
Or is it just that trust-fund scumbags like to freelance with their Hooverite economics?
Paging John Podesta…
November 19th, 2008 at 11:48 am
Why does someone like Yglesias who parrots right-wing talking points during every crisis work at CAP?
Why does someone like Petey who apparently believes that Matt Yglesias neither does nor ever will have anything useful to contribute to the discourse insist on making 20 disparaging comments for every one post Matthew makes?
November 19th, 2008 at 11:53 am
And it’s trust-fund scumbags like Yglesias who are outraged that unionized workers might get pensions.
Weird. I wonder if it hurts to be that unhinged?
November 19th, 2008 at 11:54 am
Ya, they should have Lear pooled.
John McCain was right to tell that guy he couldn’t pick lettuce for $50 an hour, because he was talking to a roomful of conservatives. Face it: they couldn’t.
A lot of factory retirees are crippled with debilitating arthritis, back injuries, shoulder injuries, hearing loss and missing limbs. Conservatives are appalled that workers earned a living wage, appalled that they earned health care and appalled that they earned pensions. Conservatives are appalled that OSHA required hand guards and earplugs.
So I guess I’m not surprised by any of this, but still. Big Business is long overdue for some major housekeeping.
November 19th, 2008 at 11:57 am
My socialist views aside, I wish I had a trust fund made up of shorted financial company stocks.
November 19th, 2008 at 12:21 pm
To be fair, whether or not these guys fly coach will not affect the competitiveness or survival of their companies because the cost is small compared to these firms’ overall expenses. Pensions, however, are a much more significant expense and reducing them really would have an impact on the prospects for GM to ever stop losing money.
Besides, once you’ve decided to pay your CEO ~$10k/hr it’s a false economy to have him waste time flying coach.
November 19th, 2008 at 12:28 pm
Besides, once you’ve decided to pay your CEO ~$10k/hr it’s a false economy to have him waste time flying coach.
True. However, Marie Antoinette’s suggestion that the peasants eat cake didn’t make the peasants’ lot worse in any concrete way, either. The point is that lavish consumption by the rich in the face of widespread middle-class misery looks pretty contemptuous.
November 19th, 2008 at 12:30 pm
DCreader, I believe the point here is that CEOs flying on private jets to beg for bailout money is symbolic of something larger. Yes, saving $20,000 on a single trip isn’t going to stop GM from going bankrupt. But executive compensation (which goes beyond just the CEO) adds up to a tremendous amount of money and is certainly a part of these companies financial problems.
If GM workers lose their pensions then GM executives should take an across the board 90% pay cut and lose their own golden parachutes. And, yeah, start flying first class at the very least instead of on company provided private jets.
November 19th, 2008 at 12:30 pm
Petey, I know I’m not supposed to feed you and all, but seriously, what the fuck are you talking about dude? Matt says conservatives are outraged about unions and you say, “NO!!! MATT IS THE ONE WHO’S OUTRAGED ABOUT UNIONS!!!!” How is this anything other than “I know you are but what am I?” Bonus question - what the fuck should Matt say that would make you happy?
November 19th, 2008 at 12:51 pm
It’s interesting that those who continually wish to blame automakers lack of competitiveness on the unions always seem to get a hearing - yet the fact that American automakers have to pick up their employee’s health care costs while competing against foreign companies whose employees health care costs are nationalized is never brought up.
Why can’t we use this whole auto industry thing to kick start a national discussion on the health care issue?
November 19th, 2008 at 12:54 pm
actually, conservatives don’t want to bail these guys out — it’s the democrats that do. remember? I don’t understand your jab at conservatives here…
November 19th, 2008 at 1:04 pm
I agree with Ethel-To-Tilly; if this doesn’t prompt serious health care reform then what will?
November 19th, 2008 at 1:11 pm
To be fair, whether or not these guys fly coach will not affect the competitiveness or survival of their companies because the cost is small compared to these firms’ overall expenses. Pensions, however, are a much more significant expense and reducing them really would have an impact on the prospects for GM to ever stop losing money.
Now, now. Don’t confuse poor Matt with any actual rational analysis of the relevant differences.
Compared to the lifestyle of a poor rural citizen of the developing world, Matt’s frequent jetting around the country and overseas on various junkets is as wasteful and profligate as CEO private jets are to him.
November 19th, 2008 at 1:17 pm
It’s interesting that those who continually wish to blame automakers lack of competitiveness on the unions always seem to get a hearing - yet the fact that American automakers have to pick up their employee’s health care costs while competing against foreign companies whose employees health care costs are nationalized is never brought up.
It’s been brought up numerous times. Other U.S. industries are highly competitive against foreign companies. And Toyota and Nissan manage to make profits on their U.S.-built cars. So, sorry, you don’t get to excuse the UAW’s absurd demands on the grounds that the U.S. lacks national health care.
November 19th, 2008 at 1:53 pm
The UAW is being absurd in demanding that the auto companies honor the contracts they signed? I thought that wingnuts didn’t believe in much else but the inviolability of contracts.
November 19th, 2008 at 2:04 pm
snoey beats me to the punch! if the UAW demands were really absurd, then it was up to executives at the big 3 to push back.
and, of course, mixner doesn’t really know what he’s talking about: the fact that private industry has to shoulder employee heath care costs is a burden on every single private employer competing with companies in more rational environments. it’s an enormous problem for everyone. if it weren’t, US exports would be considerably higher.
but snoey, to go back to you, when there’s a conflict in the right wing mind between dumping on unions and other principles, dumping on unions is always and forever the winner.
meanwhile, as for rational analysis, mixner, the rational analysis is this: when you’re going bankrupt, every single frickin’ penny counts. when you’re asking for a government bailout, the atmospherics count.
so on both perfectly rational grounds, private jetting to ask for government money to keep the company you’re running into the ground solvent is insane.
PS. of course, private companies owning private jets is insane too: if you really think it’s more productive for your senior management not to have to go through security and sit around airports (and there is a good argument there), then you buy into netjets or one of its competitors. buying your own jet is simply wasteful hubris on the shareholder’s dime.
(as an example, i know an architect in Los Angeles who recently had an assignment in the building where michael eisner now has his offices. now michael eisner didn’t hesitate to spend shareholder’s dollars to build luxurious offices for disney, but now that it’s his own nickel? he’s in cheap offices in a cheap building - comparatively, that is. amazing, huh? never saw that one coming….)
November 19th, 2008 at 2:15 pm
for one, Marie Antoinette never actually told anyone to eat cake.
But nonetheless, Matt cant have it both ways. He continues to write faux union favorable posts, but simultaneously pushes for bankruptcy proceedings -which to be fair, he does not understand.
But the autoworkers Matt pretends to support will be out of a job, as will numerous others, if Bankruptcy was pursued.
In the end, I don’t really care whether MY likes union workers or not, but I am baffled that he 1) continues to post on a such he is so clearly unfamiliar with and 2) that he somehow believes it is wise to risk the entire American economy on his whimsical ideological fantasies.
Well, Im not really that surprised.
November 19th, 2008 at 2:26 pm
The U.S. government maintains a huge fleet of aircraft while running $500 billion deficits. Maybe Congressmen can fly commercial on junkets or multi-star generals can fly commercial on their trips around the world.
Of course, once you have flow private when it takes so much less time, it is hard to go back to commercial.
November 19th, 2008 at 2:26 pm
jeff, matthew can speak for himself, but i don’t understand what makes you so certain that bailing out the Big Three isn’t a whimsical ideological fantasy?
we bailed out chrysler a quarter century ago; here we are again. are you seriously going to argue that things worked out well from that bailout?
it’s a tough call what to do in this situation, but the notion that bankruptcy is unthinkable because it might lead to changes in existing wage rates sounds rather too much like why england ended up with thatcherism: because no jobs could ever be sacrificed, no wages could ever be changed, no work rules could ever be modified in the nationalized industries. and so, in the 1970s, if you were in a steel or coal mining union, you did fine in the face of 30% inflation, becuase you were getting your contract renegotiated upward with every uptick in inflation.
right up until the point that the vast majority of english citizens said “nuts to this” and voted in thatcher.
i’m not convinced which way is better (although i lean to bankruptcy with the government serving at the DIP-financing source), but i am convinced that simply saying we must bail out the big three because a bankruptcy filing will lead to breaking of existing contracts isn’t any more sophisticated a level of thought than you think matthew is at.
November 19th, 2008 at 2:29 pm
should read:
“1)continues to post on an issue he is so clearly unfamiliar with”
November 19th, 2008 at 2:39 pm
One word… “Versailles”
November 19th, 2008 at 2:48 pm
the notion that bankruptcy is unthinkable because it might lead to changes in existing wage rates
No.
I am not opposing bankruptcy for this reason. Rather, I oppose an unfettered bankruptcy - that is one in which the government does not finance the Big 3 during the bankruptcy period.
Why?
Because the industry - and the country by extension - cannot survive a standard Ch. 11 bankruptcy. People will not buy cars from a bankrupt company. So you are talking about liquidation, not salary restructuring.
In short:
I think it is unconscionable to exacerbate the nation’s economy by significantly increasing the unemployment rolls during a catastrophic recession. 1 in 10 jobs depends on this industry and playing with their existence is not just dangerous for them but the nation as a whole.
This is not about salary restructuring.
November 19th, 2008 at 2:49 pm
and, of course, mixner doesn’t really know what he’s talking about: the fact that private industry has to shoulder employee heath care costs is a burden on every single private employer competing with companies in more rational environments.
Howard clearly neither knows what he’s talking about, nor does he bother reading the posts he’s responding to. Whether or not the absence of national health care is a burden on U.S. employers (a highly dubious assertion), the fact is that many U.S. industries are highly competitive with their foreign counterparts. In addition, Toyota and Nissan build highly competitive cars in U.S. factories employing U.S. workers, who aren’t covered by national health care any more than UAW workers are. You cannot therefore appeal to the absence of national health care to try and excuse the UAW’s role in bringing the Big Three to bankruptcy.
November 19th, 2008 at 4:09 pm
Howard clearly neither knows what he’s talking about, nor does he bother reading the posts he’s responding to. Whether or not the absence of national health care is a burden on U.S. employers (a highly dubious assertion),
Not sure why you’d find this dubious. Overall US healthcare spending is almost double that of any other industrial nation, without producing measurably better results. Not all of that extra burden falls on employers, but much of it does, and it certainly isn’t a competitive advantage.
…the fact is that many U.S. industries are highly competitive with their foreign counterparts. In addition, Toyota and Nissan build highly competitive cars in U.S. factories employing U.S. workers, who aren’t covered by national health care any more than UAW workers are. You cannot therefore appeal to the absence of national health care to try and excuse the UAW’s role in bringing the Big Three to bankruptcy.
It’s true that other industries and foreign automakers with US operations are competitive. Some of those industries are even unionized. It’s unclear to me how that’s supposed to reflect badly on the UAW.
After all, US Toyota plants also pay for healthcare, retirement benefits, and generous wages (inclusive of bonuse, just as high as Detroit’s). Somehow they’re not bankrupt.
I mean, I guess if autoworkers worked for free, there wouldn’t be problem. But you might as well blame Detroit’s failure on the cost of steel. If they paid half-price for that, they’d probably be in the black. The blame clearly lies with greedy steel producers. And paint! Why should they have to pay for paint? Etc.
In the end, I think we just have to blame Detroit’s failures on several decades worth of poor decisions by management.
November 19th, 2008 at 4:11 pm
Oops, obviously second para above is me, not a quote.
November 19th, 2008 at 4:27 pm
Virgin Mixie No-Friends is apparently unaware of what ‘legacy costs’ means. Perhaps in his fantasy world, Honda and Nissan invented a time machine that allowed them to assemble cars in the US many decades before their factories opened.
November 19th, 2008 at 4:55 pm
DMonteith. I mean, bubbleandsqueak:
It’s true that other industries and foreign automakers with US operations are competitive. Some of those industries are even unionized. It’s unclear to me how that’s supposed to reflect badly on the UAW.
That doesn’t surprise me.
After all, US Toyota plants also pay for healthcare, retirement benefits, and generous wages (inclusive of bonuse, just as high as Detroit’s). Somehow they’re not bankrupt.
Wages and benefits for Big Three autoworkers are far higher than for Toyota’s U.S. workers. Toyota is not saddled with the absurd wages and benefits structure that the UAW managed to get the Big Three to agree to. As a result, Toyota’s workers still have jobs, while the Big Three’s workers are facing unemployment. The UAW shot itself in the foot. Poetic justice.
November 19th, 2008 at 5:27 pm
Mixie’s clearly confused by discussions with more than one person. And by legacy costs.
November 19th, 2008 at 5:32 pm
Actually, I would call the crashing and burning of the big 3 as a result of decades of mismanagement, emphasis on gas guzzling vehicles, and poor quality control poetic justice for the incompitent and over-compensated executives. Except that the executives will all escape with their golden parachutes funded at taxpayer expense while the line workers will be forced to give up their jobs and pensions.
November 19th, 2008 at 5:33 pm
The name’s printed right there at the top of the post, Mixie. Although your inability to read it is an endless source of amusement to me (and, I’m guessing, DMonteith, wherever he or she is), it does border on pathological.
Toyota workers in KY make $30 an hour in wages and bonuses. The average GM UAW worker makes only $27/hr.
Benefits are trickier to figure, but there’s a strong case to be made that any difficulty with say, retirement benefits, probably has more to do with chronic historical mismanagement of those obligations on the part of the automakers rather than any problem with the actual level of compensation.
Put another way, if the union asks for an industry competitive level of compensation, and the company is unable to afford it is that a union problem, or a management problem?
November 19th, 2008 at 5:38 pm
VMN-F is also apparently fuzzy on what actually gets made in the various car plants across the US, and how that might affect the wage stucture.
Of course, health care costs can’t have had any impact on the number of plants opening in Ontario, can they? When Dalton McGuinty cites the province’s Medicare coverage as a major attraction for auto builders, he’s clearly an idiot, fool, moron or whatever petulant insult Mixie wants to spit out with his pacifier.
November 19th, 2008 at 5:39 pm
pseudonymous in nc,
Toyota workers in KY make $30 an hour in wages and bonuses. The average GM UAW worker makes only $27/hr.
No they don’t.
Benefits are trickier to figure, but there’s a strong case to be made that any difficulty with say, retirement benefits, probably has more to do with chronic historical mismanagement of those obligations on the part of the automakers rather than any problem with the actual level of compensation.
You are welcome to try and make that alleged case, if you think there really is one.
November 19th, 2008 at 5:45 pm
bubbleandsqueak,
VMN-F is also apparently fuzzy on what actually gets made in the various car plants across the US, and how that might affect the wage stucture.
What actually gets made in the various car plants across the US, and how does that affect the wage stucture, bubble? Substantiate your answer.
When Dalton McGuinty cites the province’s Medicare coverage as a major attraction for auto builders,
Show us where Dalton McGuinty cites the province’s Medicare coverage as a major attraction for auto builders. What evidence can you offer that Medicare coverage actually is a major attraction for auto builders?
Mixie wants to spit out with his pacifier.
“My name is pseudonymous in nc and I live in a permanent state of uncontrollable rage.”
November 19th, 2008 at 5:53 pm
Actually, I would call the crashing and burning of the big 3 as a result of decades of mismanagement,
Management was probably foolish to cave in to the UAW’s demand, yes. But the UAW shot itself in the foot by making those demands in the first place. Thankfully, it is unlikely that U.S. autoworkers will ever enjoy the absurdly high level of wages and benefits that the UAW managed to wrestle out of the Big Three over the past few decades. The automaker debacle is another nail in the coffin for labor unions in the United States.
November 19th, 2008 at 6:34 pm
Becoming a CEO in the last generation was basically being given a liscense to steel. Most CEO’s probably didn’t know a whole lot about the companies they were “running” and probably didn’t care all that much anyway. All they wanted to do was see just how much money they could squeeze out of the place.
Meanwhile economists were hard at work justifying the disgusting salaries these idiots were being paid because if the market says their services are worth tens of millions then their services really are worth that much. Of course this was all garbage, and if recently fallen CEO’s view the rest of the country as a pack of suckers then it’s because we are.
November 19th, 2008 at 7:12 pm
If Matt had read Lee Iaccoca’s book, he’d know that even though Lee took a symbolic $1 a year salary, he still flew on a private company jet and refused to give that up when flying to Capitol Hill, and for very good reasons.
November 19th, 2008 at 7:13 pm
Alright, someone should really try to prove their point with a citation or two.
November 19th, 2008 at 7:22 pm
Benny Lava: Mixie needs to take a few classes in how to have a discussion with more than one person.
And sorry, Mixie: by your own rules, you don’t get to demand evidence for other people’s claims unless you provide evidence for your own.
November 19th, 2008 at 7:30 pm
And sorry, Mixie: by your own rules, you don’t get to demand evidence for other people’s claims unless you provide evidence for your own.
Yes. Mixner has a long history of this. He loves to shout for EVIDENCE for all claims made by others but seldom, if ever, offers any of his own. It makes arguing with Mixner fairly pointless, but what are you going to do? He’s the best right-wing commenter we get here. Who else are you going mix it up with? 24Ahead? I mean, you have to have some standards.
November 19th, 2008 at 7:43 pm
Yes. Mixner has a long history of this. He loves to shout for EVIDENCE for all claims made by others but seldom, if ever, offers any of his own.
You’re funny, Rob.
November 19th, 2008 at 7:52 pm
It’s not a matter of “outrage” over pensions; it’s a matter of whether the inverted pyramid that the Big three pay for now are in any way, shape, or form sustainable. They aren’t - and they won’t be honored by the Big three in the long term. They’ll end up being destroyed or taken over by the PBGC, because there’s simply no way any corporation can make the kinds of promises they made and expect to live up to them.
All three deserve to go bankrupt based on their many, many years of management incompetence.
November 20th, 2008 at 3:58 am
Republicans don’t hate unions per se but their entire operation depends on cheap labor.
“Through the fascist agency, capitalism sets in motion the masses of the crazed petty bourgeoisie and the bands of declassed and demoralized lumpenproletariat — all the countless human beings whom finance capital itself has brought to desperation and frenzy.”
November 20th, 2008 at 10:30 am
pseudonymous in nc, jack lecou,
Is it really so hard to keep it straight, Mixie?
Toyota workers in KY make $30 an hour in wages and bonuses. The average GM UAW worker makes only $27/hr.
No they don’t.
November 20th, 2008 at 10:40 am
Of course, that article is from 2007 and, even for the Japanese automakers, I imagine bonuses may not be quite as large this year, but it’s still pretty revealing.
November 20th, 2008 at 11:08 am
Yes. Mixner has a long history of this. He loves to shout for EVIDENCE for all claims made by others but seldom, if ever, offers any of his own. It makes arguing with Mixner fairly pointless, but what are you going to do? He’s the best right-wing commenter we get here. Who else are you going mix it up with? 24Ahead? I mean, you have to have some standards.
So true. Maybe we should start a support group for each other or something.
November 23rd, 2008 at 2:56 pm
Really, this is what we are worried about? These execs get called to Congress and no one wants to hear “we’ll be there next week, no flights available” so they have jets. How many jobs do those jets create at small airports who service them? A line worker at GM making $75 and hour and $3000 of every car goes to pay huge UAW negotiated deals for people who no longer work for GM might be a bigger problem no? GM spends over 1 Billion a year caring for people who no longer produce anything for GM. That is simply a model that will not work. The big three are failing because of it, Social Security will fail because of it and any other company that tries it will fail. Ponzi schemes don’t work and someone always gets screwed and these are simply ponzi schemes.
But yeah, let’s make GM sell their jets…that will fix everything!
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