By on March 8, 2010

The personal transportation choices of auto executives has always been an easy point of reference for members of the mainstream media looking for an easy story. From Alan Mulally’s Lexus to Akio Toyoda’s Davos Audi getaway, auto execs’ use of non-company vehicles is always good for a quick “gotcha” headline. But no story in this rich oeuvre has had quite the impact of Jet-Gate, the name given to the mini-scandal that erupted when the executives of Ford, Chrysler and GM arrived in Washington DC for bailout hearings in three separate private jets, prompting derisive comments from members of congress. The PR misstep has haunted Detroit ever since, inspiring federal rules barring bailed-out automakers from using executive jets, and making transportation choices for auto-related DC hearings a major priority for automaker PR: Toyota’s Jim Lentz clearly had the episode in mind when he arrived for recent hearings in a recalled and repaired Toyota Highlander. And thanks to a recent revelation about GM Chairman/CEO Ed Whitacre’s use of executive jets, furor over auto-exec transportation is clearly a long way from playing itself out.

The Detroit News reports that a clause in Whitacre’s $158m compensation package from AT&T includes ten hours per month of company jet time, at a cost to the company of about $20,000 per month. And despite the facts that Whitacre’s jet use isn’t costing taxpayers anything, and that jet use makes up a relatively tiny fraction of his overall AT&T compensation, the lingering shadow of Jet-Gate makes this big news. David Lewin, a professor at the Anderson School of Management at the University of California, Los Angeles, explains:

It’s more than a perception problem. If I was an AT&T shareholder or executive, I’d put up a stink about this

It’s something he uses at his discretion. If he’s using it to commute to and from San Antonio, I don’t know. How Ed chooses to get to and from San Antonio is the same as how I get to and from Northville. It’s my prerogative how I get to work and how he gets to work
this would play better if GM was actually making something of itself. Corporate perks are looked at very differently when a company is knocking the cover off the ball than when you’re on the public dole.
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10 Comments on “The Revenge Of The Son Of Jet-Gate...”

  • avatar
    Mark out West

    Some perspective: The largest fleet of non-fractional Gulfstreams in the world is owned by the U.S. Armed Services, mostly the Air Force.

  • avatar

    What Lewen leaves unsaid is that Whitacre first negotiated the deal when he retired in 2007. If it wasn’t a problem then, why would it be a problem now?

    I believe it was a problem then. It’s just that a booming economy was still glossing over the fact that the CEO-class of this country have come to believe that they individually (and not the tens of thousands of workers they manage) are responsible for their companies’ success. The level of entitlement that CEOs have come to expect rivals that of top athletes, and I find it just as appalling.

  • avatar

    It interesting that some people are complaining about his use of corporate jets as part of a retirement plan from ATT. I think that is really grasping at straws.

  • avatar

    Undercover Boss needs to go to Detroit…..

  • avatar

    This is the reddest of red herrings. Rick Wagoner might have garnered enough public support to keep his job if he had pointed out in the November 2008 hearings that none of the Congressional gasbags ever complained about GM’s airplanes while they were riding on them.

    Nancy Pelosi has been widely reported to commute to San Francisco every weekend at our expense aboard an Air Force 757. I object to that far more.

    Good for Big Ed not moving to a hell hole like Detroit, and good for him to have negotiated such a retirement plan, which costs me nothing unless I choose to use AT&T phone service (which I don’t).

    Among the many other facts that get lost in Washington is that business aviation pays for itself if you really have to travel extensively, especially to out of the way places. San Antonio doesn’t seem out of the way, but you can’t even fly there nonstop from Detroit unless you want to risk your life on a commuter airline.

    I hope Whitacre tells his critics to fvck themselves.

  • avatar
    crash sled

    Hey, the last plaace you wanna be caught is between Rattlesnake Ed and his private jet… I pity the fool. ;-)

    And yes, the congresscritters have been hitching rides on corporate airplanes, probably since the day after the Wright Brothers took off from Kitty Hawk. It’s a corrupt payoff, and shouldn’t be allowed. The congresscritters should be
    riding commercial coach.<——-PERIOD

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