Bailout Watch 236: Ford Embraces Post-Jet-Gate Morality
Now that GM has launched its PR response to Jet-Gate, Ford is also taking steps to be ensure that it is perceived as an austere, efficient company. And no, they’re not making Mulally give up his Lexus (he was already supposed to have, although ABC News appears to have caught hime in flagrante delicto with his LS430 as recently as this summer). The AP reports that post-begathon criticism has Ford staff “looking at all of our operations to reduce costs and operate more efficiently,” which just might include giving up some undisclosed number of the five jets it currently operates. “Ford’s top priority is to continue making progress on our transformation plan, and we do not want anything to distract us,” spokesman Mark Truby said in a statement. “We are exploring all cost-effective solutions for our air travel.” Ford operated nine jets in 2005, when its stock price opened the year at $13.17. Ford’s stock is currently valued at $1.43 per share.
I just had a look on GM's "People Finder" system, to see how many are employed in the corporate jet area of the company. Right now we have about 25 people in ground operations across 2 shifts servicing the jets. We also have about 24 Pilots and Co-Pilots, a few mangers, a Director of Flight Operations and a couple of administration staff. I would hate to even guess how much it costs to employ that amount of people. On top of that you have to lease the actual planes - until recently 7 of them for GM. So, after paying all these people does anyone out there think that it is cheaper for the executives to fly on the corporate jets rather than comercial?
Holden: Yes I think it can be cheaper for the executives, when flying with several passengers, to fly general aviation airplanes. In my opinion the jobs you described are fixed costs (or sunk costs?), and are likely incurred if the jet sits in a hangar. Variable costs make up a large portion of the hourly operating expenses and when that per hour expense is distributed on a per seat basis, the mission starts to make more economic sense.