Say What?!? Big Three CEOs Flew Private Jets to Plead for Public Funds

Above are the 3 wisemen in question, how would you like to be one of the unfortunate workers that just got laid off (just before Christmas) and you see this. Ever wonder why they are in such bad shape?!? It seems like they are just asking for it.

Auto Industry Close to Bankruptcy But They Get Pricey Perk

The CEOs of the big three automakers flew to the nation's capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.

The CEOs of GM, Ford and Chrysler may have told Congress that they will likely go out of business without a bailout yet that has not stopped them from traveling in style, not even First Class is good enough.

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.

"We want to continue the vital role we've played for Americans for the past 100 years, but we can't do it alone," Wagoner told the Senate Banking Committee.

While Wagoner testified, his G4 private jet was parked at Dulles airport. It is just one of a fleet of luxury jets owned by GM that continues to ferry executives around the world despite the company's dire financial straits.

"This is a slap in the face of taxpayers," said Tom Schatz, President of Citizens Against Government Waste. "To come to Washington on a corporate jet, and asking for a hand out is outrageous."

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.

Mulally made his case Tuesday before the committee saying he's cut expenses, laid-off workers and closed 17 plants.

"We have also reduced our work force by 51,000 employees in the past three years," Mulally said.

Yet Ford continues to operate a fleet of eight private jets for its executives. Just Tuesday, one jet was taking Ford brass to Los Angeles, another on a trip to Nebraska, and of course Mulally needed to fly to Washington to testify. He did not address questions following the hearing.

"Now's not the time to do that sort of thing," said John McElroy of the television program "Autoline Detroit."

"Now's the time to be humble and show that you're sharing equally in the sacrifice," McElroy said.

GM and Ford say that it is a corporate decision to have their CEOs fly on private jets and that is non-negotiable, even as the companies say they are running out of cash.

Private jet travel is perhaps the greatest perk of all for CEOs, who say it allows them to travel more efficiently and safely, even in a recession.

AIG, despite the $150 billion bailout, still operates a fleet of corporate jets. The company says it has put two out of its seven jets up for sale and is reviewing the use of others. Though there are no such plans by GM or Ford.

It appears that the senior management of the automakers simply don't get it," said Schatz.

-No kidding.

Source;

http://www.abcnews.go.com/Blotter/WallStreet/Story?id=6285739&page=2

'Detroit meltdown' worries Toyota, Honda

Nicolas Van Praet And Alia McMullen,
Financial Post Published: Thursday, November 13, 2008

Japanese automakers Toyota Motor Corp. and Honda MotorCo. say they are "very concerned" about the potential failure of Detroit's three car companies as analysts warn a bankruptcy would throw the entire auto supply base into chaos and rattle the operations of even the most profitable manufacturers.

The comments came as Canada's Finance Minister, Jim Flaherty, yesterday said some residents in his Ontario riding of Whitby-Oshawa, home to the Canadian headquarters and main assembly factories of General Motors Corp., don't want the government to hand GM and other Detroit automakers a bailout.

"We're very concerned" about a Detroit meltdown, said Mike Goss, spokesman for Toyota Motor Engineering &Manufacturing North America Inc. "In the past couple of days I've been asked 'Wouldn't it be great for Toyota if others fail?' We think the opposite is true."

The vehicles Toyota builds in North America contain an average of 75% domestically sourced parts and systems, and Toyota is reliant on many of the same suppliers used by GM, Ford Motor Co. or Chrysler LLC, Mr. Goss said.

The Japanese automakers are working to identify which suppliers have the biggest exposure to the Detroit firms.

They are also developing emergency plans in the event they need to replace a company providing them with parts. "Everything's on the table about what we might have to do," Mr. Goss said.

Should one or more of the Detroit three go bankrupt next year, all U. S. automotive operations, including those of the so-called new domestic manufacturers like Honda and Nissan MotorCo., will be paralyzed for at least one year because of the high likelihood many suppliers will run out of money, according to an analysis by the Center for Automotive Research, a think-tank based in Michigan.

"We expect a major wave in supplier bankruptcies or a 'supplier shock,' " the analysis said.

North America's roughly 6,000 auto suppliers are already under severe pressure from a collapse in U. S. sales of cars and trucks to 25-year lows, which has forced the Detroit automakers to cut output in the face of lower demand. Ford MotorCo. said yesterday it will temporarily shut down nine of its plants continent-wide this quarter as it builds 211,000 fewer vehicles than a year earlier, including Ontario assembly factories in Oakville and St. Thomas.

We're very concerned" about maintaining the stability of the supply base, said Edward Miller, spokesman for American Honda Motor Co. "Obviously this is very disruptive."

Mr. Flaherty said he expects U. S. lawmakers to craft a proposal for a rescue of the U. S. auto industry after GM warned last week it may not have enough cash to fund operations past this year amid a credit crisis. Discussions so far have centred around a bridge-loan package worth US$25-billion, in addition to US$25-billion worth of separate loans already approved to help the Big Three build more fuel-efficient vehicles.

"Economically, GM may prove too big to ignore simply because of the implications for not just employees, but also retirees and all the supplier companies if it was to collapse," said Nigel Gault, chief U. S. economist for IHS Global Insight Inc., an economic-analysis firm

Investors bet yesterday a bailout would go ahead, pushing up shares of GM by as much as 23% and Ford shares by as much as 11%.

Many Canadians say the federal government should do something to help the auto sector, Mr. Flaherty acknowledged at an economic conference in Toronto. "[But] there are lots of people that say, 'Don't do anything. Don't use my tax money to bail out an enterprise that may not survive.' " He added the views are not coming from rich constituents but "people on the street."

Mr. Flaherty said any aid Canada would offer would be for "transformational" support. "If we are going to do something, [we need] to find a way to ensure the sustain-ability, survivability, a product mix that is going to have profit here in Canada."

Henry Paulson, the U. S. Treasury Secretary, said yesterday automakers are a key part of the United States' manufacturing base but that any effort by government to rescue them "has got to be one that leads to viability."

Mr. Paulson is resisting pressure by Democratic lawmakers in the United States to use the US$700-billion Troubled Asset Relief Program, a bailout fund aimed at banks, to help Detroit.

Source;
http://www.financialpost.com/story.html?id=954380