Thursday, November 20, 2008

We're so poor.

The CEOs of the big three car makers all turned up in Washington this week to plea poverty and beg for billions of dollars in taxpayer bailout money. All three of them turned up in corporate jets - at about $20,000 round-trip cost. And all three of them refused to take a cut from their $28M salary to $1 and just receive the benefits and stock options.
Then they said they were running out of money.
Maintaining seven private jets each (plus a fleet of King Airs and other light aircraft) will do that to your cash flow. It would of course be cheaper to fly commercially in first class, or heaven forbid, coach. Or even chartering someone else's private jet - these are all cheaper options that would save money.
They've laid off 51,000 employees between them. If all three CEOs took a $1 salary then that would have saved 16,800 of those jobs. Getting rid of 21 corporate jets with their associated maintenance and operating costs would have saved the other 34,200 jobs easily.
I have the same opinion on this as I did on the $700bn bailout package - vote it down. As a taxpayer it's not my responsibility that the car makers have squandered their cash and can't make a car that does more than 25mpg. Screw them. Let them fail. I don't see Honda, or Toyota, or Daewoo, or Hyundai begging for cash. Why reward Ford, Chrysler and GM's poor business ethic with taxpayers money when they clearly couldn't care about actually saving money?


Joely08 said...

I agree with you 100%! If they are STILL making cars that get a "super fuel efficient 24 MPG HWY", then I just cannot throw my support behind a bailout.
It just pisses me off greatly that they have no idea how to make quality cars or even show that they really do care about their companies; if they did, they'd take the $1 salary and rid themselves of their luxuries. I wonder how many of their employees and factory workers have jets?
Once they start to make cars that get ATLEAST 35 MPG HWY and stop assuming we are stupid and think 24 MPG is high and STOP, FOR THE LOVE OF GOD, STOP using the word "hybrid" as just a name plate (as in the Ford Escape and Cadillac), then I will throw my support behind them.

Adam said...

I'm a big fan of your website, but I think the "Let them fail" approach will have huge negative effects the on economy. There are a lot of suppliers, and in turn jobs, that will feel the effects of any of the big 3 failing.

Ford and GM especially, seem to be on the right track with their new products- the Chevrolet Cruze, Volt and Malibu all look to be promising vehicles. (The Malibu has been ranked on par with the Camry). Chevy already has 8 cars over 30 mpg...

Also, while I don't agree with corporate jet usage, I think that is pretty common for large companies. I don't think you'll find many CEOs or Presidents that fly coach.

Lastly, at least the proposed 25 billion bailout is going to support American companies and jobs. It's a small share of the 700 billion designated for the Wall Street bailout.

Chris said...

The problem is that the big 3 would have us believe that it's a miracle of science and technology that they managed to "squeeze" 30mpg out of their vehicles. In reality, it's a miracle that they can still build vehicles that CAN'T do over 30mpg. Look at Japanese and European cars - they've been getting 45mpg or more for years. Even Detroit had 40+mpg cars 15 years ago, and you can't tell me that it's "stricter emission regulations" because that's simply not true. In Europe, the new Euro-5 regulations are much stricter than even California, and yet I can buy a car from the showroom floor that will easily return 70mpg. So the big 3 either need to wake up and stop lying to us, or they need to fail. I don't believe my tax dollars should be used to reward shoddy corporate behaviour. What about all the supporting businesses? Let them take it up with the car manufacturers once they're in chapter 11.