Bailout Watch 348: Jet-Gate Becomes Jet Hate

Robert Farago
by Robert Farago
bailout watch 348 jet gate becomes jet hate

Back when the CEOs of Chrysler, Ford and GM were “caught” flying corporate jets into Washington to beg for bailout billions, we cautioned our readers that the media scrum had made a great landing at the wrong airport. Yes, these execs were frittering away millions of dollars on their jet fleets. Yes, their Gulfstream travel violated their companies’ supposedly proletarian appeal; Henry Ford’s model T and all that. But blaming jet travel for the CEO’s woes was like blaming Harrison Ford’s limo for the travesty that was the fourth Indiana Jones movie. So yes, but no. Anyway, The Detroit News reports (of course) that Sunflower State senators have lifted the corporate jet ban from the non-automotive recipients of Congress’ recently-refilled, near-as-dammit trillion dollar trough. “Kansas is a center of aircraft manufacturing, and Kansas lawmakers complained that the provision could reduce aircraft orders and cost jobs. This week, House Financial Services Committee Chairman Barney Frank, D-Mass., author of the bill, lifted the jet ban. Could the DetN resist placing another mountainous chip upon the shoulder of their hometown heroes? Are you kidding? “So remember, folks: According to Congress, it’s only a waste of taxpayer money if auto execs are the ones flying private.”

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  • CamaroKid CamaroKid on Jan 18, 2009
    @golf4me : Whwn you have execs making 20m per year waiting around in airports for 2-3 hrs for a 3 hr flight, it makes no sense. Flashpoint : LISTEN Up - my TIME IS MONEY. I kinda get the feeling that none of you have EVER flown first class... You don't wait 2-3 hours.. you wait 30 minutes TOPS... you are the first on, the first off... They even whisk you through security. I've been on planes where they hold the plane at the gate so a first class passenger can get right on with ZERO wait time. This was, is, and will ALWAYS be a PERK. PERIOD... Lets do the business case.. A private jet will save, if you are very lucky... 30 minutes a flight. If you make 20m a year that means you make about $11,000 an hour (nice work if you can get it BTW) So that 30 minutes of "unproductive" time costs about $6,000. (I am generously rounding up in the favor of the Private jet as I go BTW... it doesn't matter, the business case isn't even close) Private "Learjet" or a Citation jets charge out at a STARTING price of about $160,000 for 24 hours of air time... (about 6500 per hour) So that 2 hour flight that we are worrying about wasting time on costs $13,000... (again rounding in favor of the private jets) So the cost is $13,000 (a hard cost) and we save $6,000 (a soft cost)... The net is $7000... You are going to tell me that you can't find a first class ticket for any 2 hour flight anywhere in the world that costs anywhere close to that... Lets not chuck around business cases and time is money until you've actually done the math.

  • Landcrusher Landcrusher on Jan 18, 2009

    Camaro, As a person who has flown first class on many free upgrades, owns a prop plane used for both business and leisure flying, and even flown on a business jet because it happened to be taking some senior executives the same place on the same day as we were going, I can tell you that you are all wrong. If I understand you correctly, you are saying the first class is good enough. Well, unless you are going on a really long flight, first class is a perk. Many large corporations pay for almost any employee to get upgraded to business class on overseas trips, but domestic first class is without a doubt a perk. It's a perk that they have to give though, or many senior people would want to travel less. OTOH, a business aircraft is a HUGE timesaver. First, a business flight doesn't depart on a schedule that suits the airlines, it leaves when it suits the business schedule. That can save you more than a day in many underserved areas. Second, a business jet doesn't fly to the nearest airport with scheduled service, it flies to the nearest airport to the destination. This can save you hours in ground transport time on top of more than the thirty minutes you claim, but we all know often stretches to hours (Have you ever gone through Dallas or Chicago on a busy day?). Third, the CEO's rarely fly alone. As soon as you put a few $100 an hour employees on a bizjet, you start saving money against COACH airfare before you even start counting the value of their time. So, while your math is just fine, your understanding of the whole picture is simply off. My little prop plane flies at one third the speed of a Boeing or Airbus, but I have to fly well over 4 hours before they can even come close to being within 30 minutes door to door. There is a saying about how an airplane takes you from a place you don't want to be, to another place you don't want to be - an airport. The only reason the airlines actually work are because most people don't want to become pilots, businesses don't want to take the time to understand how to let their employees use light aircraft, and the voting public continues to use their majority to stick it to general aviation because they would rather have cheap airline tickets and don't care about little planes. In fact, they now have learned to hate them because of attacks by demagogues and folks that really don't understand the value equation. In the end it really doesn't matter though. Government officials have ZERO business making these choices. They also have ZERO business putting themselves in a position where they need to even be involved (bailouts). Lastly, everytime Congressman go vote fetching by sticking it to the fat cats, they simply end up costing everyone money. It was likely a lot cheaper to give all the CEO's lots of perks rather than have the end result of the last 30 years of chasing down their "unfair" perks be salaries in the stratosphere.

  • Essen Essen on Jan 19, 2009

    Grandstanding by congress, pure and simple. I guess they didn't learn their lesson from 1988 when they put a luxury tax on boats and nearly wiped out an industry. They feel such a need to punish the rich, but are so blind to the fact the it is the "little people" who build luxury items who get hurt.

  • Psarhjinian Psarhjinian on Jan 19, 2009
    ...I can tell you that you are all wrong. You're correct. Absolutely correct. I tried to make this point a few days ago---about air travel being an enabler for efficiency, especially for a high-cost employee---and I think people missed the point again. The issue isn't that highly-paid and ineffective people like the Detroit manufacturer's executives have private aircraft as a perk, it's that they're paid millions, sometimes tens of millions, for being ineffective. Don't cancel the jets, examine whether you're getting effective work for the money you're paying your people. If not, you may want to consider putting different people on the jet.