Thursday, November 20, 2008

Ford, GM & Chrysler Don't Need Bailout

The CEO's of Ford, GM and Chrysler left Washington yesterday empty handed. Hopefully, this ends any talk of a bailout for the automotive industry. Clearly, these companies don't need additional capital. Instead, they need to hire someone to better manage their current finances. After all, it's hard for me to empathize with these beggars when I struggle to afford an airline ticket on coach while they continually enjoy the luxuries of a private jet.

Yesterday, Rep. Brad Sherman of California derailed the automotive executives by requesting them to "raise their hand if they flew here commercial." Sherman continued, "Let the record show, no hands went up. Second, I'm going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up."

After the hearing, the Big 3 released the following statements:

GM- "Making a big to-do about this when issues vital to the jobs of millions of Americans are being discussed in Washington is diverting attention away from a critical debate that will determine the future health of the auto industry and the American economy," (GM spokesman Tom Wilkinson)

Chrysler-"while always being mindful of company costs, all business travel requires the highest standard of safety for all employees." (Chrysler spokeswoman Lori McTavish)

Ford declined to comment through spokesperson Kelli Felker. Instead, they hid behind their company policies. Well, it sounds to me like there needs to be some modifications made to Ford's long standing procedures. In the same way, GM better learn that while they may not think it's a big deal, it's a huge bone of contention among us taxpayers. In addition, Chrysler needs to come up with a better excuse than personal safety. Face it, very few people would even recognize an automotive executive. Even if someone did, how and why would they be subjected to any more danger than anyone else?

Analyst Richard Aboulafia of the Teal Group estimates that it costs approximately $20,000 for a round trip corporate jet flight between Detroit and Washington. I just priced a last minute (Nov 22-24) airline ticket from Detroit to Reagan National Airport. Even at this late stage, someone could fly round trip on Air Tran Airways for for $260 total.

It's pretty shameful that these guys had the audacity to show up in thousand dollar suits with a tin cup in their hands. Next time, they should save their $20,000 and use that money towards hiring a financial consultant.



Duke hoops fan said...

Bud -

These clowns have an antiquated, failed business model. No bank would touch their business plan. The people should not give them a dime until they come up with a plan which includes union concessions, reduced executive pay, and streamlined product lines just to name a few.

The big three are living examples of the old definition of crazy ... doing the same thing over and over unsuccessfully while expecting different results.

streiff said...

For Victor J Henderson:

Do you own an electron microscope? Otherwise I think you are full of crap.

bud said...

Duke hoops fan,

I agree. This problems extends much farther than executives flying corporate jets. From all outward appearances, the UAW wants no part of compromise. Well, let them feel the heat of potentially losing their jobs and they may chance their tune. All around, Detroit has such a dysfunctional mess that even billions of tax dollars won't repair it. The entire business model needs to be reworked. Meanwhile, let's hope the government sticks to their guns.

Zack Steinway said...

these men worked hard to earn their positions and they deserve not to be burdened by the inefficiencies of commercial air travel.

Cris Cohen said...

The auto companies sent multi-millionaires on private jets to plead for free money. That's like sending obese restaurant owners to plead for free food.

Douglas FairLand iii said...

the labor costs of USA autoworkers are only 17% higher than that of the Japanese, yet US auto executives make about 100 times that of the Japanese,.

People need to stop blaming the workers and start focusing on the executives.

streiff said...

I'm allowing the post by "Douglas FairLand iii" even though it violates my own rule against letting asshats post on this site.

Japanese auto workers average about $20 an hour

US auto workers, are a lot more than %17 higher.

Daniel said...

Let's not forget the rest of the 'bennies' the UAW members enjoy.

On average, 7 weeks vacation per year.

Oh, and try to find out how good their medical/dental benefits are.

(LASIK for everyone!)

Teamsters Local 639 said...

The UAW negotiated a good contract for its workers. We all deserve the type of benefits they have. Stop whining boys and get a better job !!!

streiff said...

yes indeedy, the UAW negotiated a great contract. And when your Ford, Chrysler, and GM workers look back on these days while making refried beans at Taco Bell they will thank you. Really they will.

And BTW, I'm not jealous of what they make. Trust me.

bud said...

Yeah, the UAW can be proud of the deal they swindled out of management. Still, their contract isn't worth the paper it's written on if the money runs out. To protect their jobs and their future, the UAW better learn to compromise some as well. If they continue to refuse, they stand the most to lose.