What do Al Gore and the Big Auto CEOs have in common?
They both like to fly in private jets – Al barnstorming to warn us of the dangers of global warming, the CEOs heading to DC to explain why we should bail out their atrociously run companies for billions. We don’t live in America the Beautiful anymore. We live in America the Black Comic.
Pity Chrysler spokeswoman Lori McTavish (see link above) who was forced to issue this pathetic excuse on behalf of her spendthrift chief executive: “while always being mindful of company costs, all business travel requires the highest standard of safety for all employees.” No matter that private planes are often less safe than commercial jets, I suppose the poor woman had to say something. It’s not a pretty picture. A report from the WSJ’s The Wealth Report tells us private jets get exceptionally bad marks for pollution, have recently been favored (2008) with exceptional tax breaks, even with the current energy crisis, and don’t pay their fair share of air safety costs (air traffic control, etc.).
I have a proposal for some legislation: It is against federal law for anyone advocating an environmental cause or seeking a government bailout to be permitted to fly in a private jet in transit to espouse their position. Call it the Simon-Feingold Anti-Hypocrisy Act. Maybe I can’t get Russ Feingold to co-sign my bill, but, hey, you’ve got to start somewhere. I was going to try Harry Reid, but he’s from Nevada and we all know Vegas is lousy with private jets. No hope there.
The stupidity of the Big Three CEOs may have saved us 25 billion. Anybody dumb enough to fly private jets to a meeting where they plan to beg for money is too stupid to run a big corporation.
Instead of the bailouts that are happening and not doing a darn thing for our econony, we could have saved a lot (and I mean a lot of money) by just giving everyone in the United States $1 million dollars.
Houses would be built, cars would be sold, land would be aquired, and investments would be buttressed.
But, alas, we have a few folks stealing money under the guise of a new depression.
If we ever needed a reason NOT to give Detroit any money, the 3 Stooges gave it to us on a silver platter (the type used on private corporate jets). Ford uses one of it’s private jets to fly Mullaly back and forth from Detroit to Seattle each and every weekend because he did not want to move. Clueless, they are clueless.
Foolish to arrive in private jets at the
expense of over $ 20,000.oo with tin cups in
their hands.
George Romney’s son has stated for several
years that Detroit should not get a bail-out
that would only delay the death of the U.S.
auto industry . Instead inorder to save the
millions of jobs , all parties involved need
to sit down at the table and restructure .
I would love to own a Buick the size of my
Mazda 3 .
Gore and the Big 3 seem to be intent on
ruining our American dream .
I dunno, I guess I’m a heretic on this. Lots of companies, even fairly small ones, have private jets. (Did you know that the third-busiest airport in Texas is in Addison, north of Dallas, which handles private aircraft exclusively?)
For the record, I don’t support the Detroit bailout (or any others), but a lot of corporate executives really do need to be in a lot of places in a hurry. I’m sure there are abuses, but come on.
It’s simply dramatics to show these guys getting to DC by flying coach, or taking Greyhound, or hitch-hiking.
A lot of corporate executives have a lot to answer for, but personally, I don’t think having corporate jets is high on that list.
Scott
If an executive (a)is actually doing useful work, and (b)has a travel schedule that involves going to places with limited airline service, then private jets can make sense even if the company is in financial trouble. But using one to get to a begging meeting is simply dumb–it’s like serving Pepsi at a meeting at which you’re attempting to sell something to the Coca-Cola Company.
Stupid PR even if justifiable on other grounds. But it’s not even justifiable on other grounds.
Here you have three people coming from the same place going to the same place and they need to be there at the same time. But they needed three planes?
well, they *are* competitors…if they’d shared a plane, somebody would probably have raised an antitrust issue..
1. It is the current Administration and Senate Republican leaders, not Democrats, who want to remove requirments that Detroit build fuel efficient cars, not Democrats. Repubs want to CONVERT the funding already set aside for development of fuel efficient cars into the bridge loan that is being requested. Dems want the bridge loan to be seperate.
2. Let’s keep in mind what we are talking about: same amount of funding as two and a half extra months in Iraq.
3. Letting the market work its magic won’t just put the Big Three and UAW out of work, it will hit the entire U.S. supply network. During a recession.
4. What about the effect of Chapter 11 on those suppliers as well?
5. Texas Dude — I assume you’re kidding about a million bucks for every American. But just out of curiosity I got out the calculator, and that multiplies to 3 followed by 14 zeros. I thought that would be a quadrillion, but it seems it would actually only be a cool 300 TRILLION. Which is still more than all world assets put together — 165 trillion.
They could’ve chartered a private jet and flew together, and taken the head of the UAW with them.
Markus, good point about Republicans and fuel efficient cars, but your 2,3 adn 4 don’t add up to me. We are rewarding true ineptitude here. Almost all commentators are predicting that this 25 billion is just the tip of a sinking iceberg. No, this is not simple but, even though I am a stockholder in GM, there is a damn good argument for sorting this out in the bankruptcy courts – and getting rid of a corrupt and inept executive class and bloated unions and starting over with something more modern and tech savvy. An ex-Micrsoft person in Seattle told that all companies have a certain arc before they die. Those guys seem to study those things. We all should.
We should horrified by government funding of “green technology.” This rarely works out well. The free market is far more successful in determining winners and losers. A socialist economy merely rewards those who are favorites of the political class. Any bail out of the American auto makers is essentially rewarding greed and incompetence. The unforgiving doctrine of moral hazard is violated—and that guarantees further mischief in the future. It is similar to giving a spoiled teenager with a drinking problem another new car after they have already crashed a number of them.
David Thompson, you over simplify. There is no question that government regulation of “green” issues is sometimes worthwhile. You can now see downtown in Los Angeles (at least occasionally). You couldn’t in the Sixties and Seventies. Kids were forced to stay home from school due to smog alerts. Government regulation – mostly via Nixon, incidentally – cleaned it up. No one has all the answers. The minute you think you do, you’re making a mistake.
“There is no question that government regulation of “green” issues is sometimes worthwhile.”
I completely agree with you! Everyone should support reasonable environment laws. Who says otherwise? You are literally knocking down a straw man. I am talking about government investing financially in “green” technologies. Moreover, this socialist behavior will also likely delay the technological advances that we require!
A number of people have previously cited the Manhattan project as an example of the government successfully supporting a major technological advancement. First of all, this goal was accomplished during wartime out of pure life and death necessity. And the project manager General Leslie Grove was given near dictatorial powers by the Roosevelt administration! The man, for all practical purposes, spent money—and risked American lives as he saw fit. Grove’s style of leadership is hardly ideal for a peacetime economy.
Mr. Simon, thank you for a quick yet informative piece.
It blows my mind Al ‘The World has a Fever’ Gore is held in high regard by many Americans.
Being a Meteorologist I’m disgusted of his mockumentary. Not to mention the lemmings who bought it!
I was frustrated as well at his receiving a Nobel though it too quickly subsided. I remembered even a self-serving terrorist like Arafat received a Nobel in 1995. What a bizarro world.
Gore is the same person who has a 10,000 sq. ft home (using 20 times the energy as that of a regular home) a private jet (emitting 4 times the carbon emission than commercial jets) and 100 ft. houseboat (which he’d recently added solar panels after media leaked it wasn’t all that ‘solar savvy). Yet, he and Obama are telling us to lower our thermostats and ‘check our tire perssure’.
Hey Al, perhaps you need to read and abide by an aboriginal saying, The more you know the less you need.” If you know so much regarding the environment and what’s ‘good for the planet’ you better practice what you preach. While you’re at it, read ‘Unstoppable Global Warming Every 5,000 Years’.
Roger,
there is an argument for sorting this out in the bankruptcy court, but also a strong counter-argument. There was a good, if somewhat repetitious debate about this on Charlie Rose last night — Barney Frank and some guy from auto industry vs. Sen. Shelby and Andrew Ross Sorkin from the Times. Best argument for bankruptcy is in regard to the union contracts, although as I understand it, the new labor contract scheduled to take effect next year is a vast improvement over previous ones from a bottom line perspective. Main arguments against bankruptcy: would allow Big 3 to stiff their creditors, and it is very unclear whether people will buy a car from a company in Chapter 11. It’s not like a flying on a bankrupt airline. Instead there are reasonable concerns about who would provide parts and other warranty guarantees to a bankrupt firm.
One other thing to keep in mind: if these companies go down the tubes, the federal government is on the hook anyway, for the pensions of their retirees, through the Pension Guaranty Fund.
I don’t deny that U.S. Automakers need to make some big, big changes to stay competitive. And maybe strings need to be attached, not by bankruptcy court judge but by Congress. But look at long term too: hundreds of millions, perhaps billions of people in China, India, other countries are going to want to buy some type of car in the coming decades. Do we really want as a nation to get out of that market?
Does anybody remember Jimmy Carter saying the solution of the energy problem was “the moral equivalent of war”? What happened was that oil prices dropped like a rock once Reagan ended Carter’s interference in the market. The only good idea Al Gore ever had was the gas tax idea to fund, not alternative fuel technology research because government is no good at picking winners, but defense. We could have funded the defense budget with gas taxes to keep prices high enough to stimulate the industry. Personally, I think Craig Venter and the guys working with him on bioengineering will solve it first but we need nuclear and drilling to get past the lag time. Obama is an ideologue and we will be in the dark soon. Not to mention the coming ice age which may have begun.
“Do we really want as a nation to get out of that market?”
No, but they way we were doing it, we were headed out of it anyway. We need genuine innovation, not the same old, same old. Think Silicon Valley, not Detroit. Barney Frank,ironically, is the most old fashioned thinker around.
Roger
You are right, the auto industry needs new young blood to redesign from the inside out regarding the technology of the cars and the same regarding
management. Since when do we let the beggars give us orders on who will run the ship, we should be in the drivers seat regarding dispersng funds and
one of the stipulations is they all retire with what they have in their bank accounts but no more bonuses for any of them. If they refuse to step down, then
let them go on a hunting trip to find the capital they need. Maybe China would help out the Buick devision, it is their favorite car. Congress is in the position to demand coopration and removal of all the dead weight in the industry. Also, right here in Pasadena we have one of the best Auto Design School’s in the US, and we would be back in the game with an American made/ designed auto industry. Imagine starting up our steel factories in the northern cities and retooling for lighter but stronger material’s and getting the union’s might not be so difficult to co-operate seeing the protential.
It is all the worker’s connected with the Auto Industry we must save, not the upper management & CEO’S, they are all replaceable.
Don’t bitch about the automakers flying private jets when Botox Pelosi can’t be bothered to fly even on a G5…she needs a big airliner to fly her and her posse to San Fransisco each weekend…..
Almost all commentators are predicting that this 25 billion is just the tip of a sinking iceberg.
That’s right – commentators. Not auto analysts, economists, or anyone else that might know something about the auto industry. Just people with pre-conceived notions about American autos that are based on what they knew back in 1975. Times have changed since then.
there is a damn good argument for sorting this out in the bankruptcy courts
Except for all of the bad arguments, like those of us who live here, but are not directly connected with the auto industry. Or those who are indirectly connected, who depend on that auto industry. Just what did we do to deserve this other than stay living where we were born?
and getting rid of a corrupt and inept executive class and bloated unions and starting over with something more modern and tech savvy.
The executive class at all of the big three haven’t been there that long. It takes a lot of time to turn around a large company, and they were on the right track until the gas crisis and credit crash hit in the same year. Blaming them for all of the problems is like blaming Donovan McNabb for losing a game in 1983. Regarding the unions, however, I admit you have a point.
Government caused the oil shocks – not enough domestic drilling, multiple blends of gasoline (thanks to you Californians), not enough refinery capcity, among others. And government caused the credit crisis thanks to the CRA and Fan & Fred. And government caused market shake-ups by forcing CAFE standards on the big three and causing them to lose money selling small cars. Government ought to help them since they’re the main cause of this in the first place.
The auto industry shutting down would idle millions of workers. The banking industry crisis idled what – 25,000 workers? Come on. The misinformation being spread around the rest of the country concerning the big three is amazing.
TV
How about this from a supplier to the big three
American Axle CEO Richard Dauch was awarded an $8.5 million bonus for defeating the three-month strike by 3,650 auto workers and successfully imposing deep wage and benefit cuts on the company’s hourly workforce.
I wonder what kind of quality product is coming from the motivated workforce they have there now. I own a small business and am disgusted by these actions. Enriching himself while cutting the workers wages in half.
The executive class at all of the big three haven’t been there that long. It takes a lot of time to turn around a large company, and they were on the right track until the gas crisis and credit crash hit in the same year. Blaming them for all of the problems is like blaming Donovan McNabb for losing a game in 1983. Regarding the unions, however, I admit you have a point.
No, its more like Donovan McNabb not knowing that NFL games can end in a tie. When you are in overtime, like the auto industry has been since 1985, you have to know your time is limited. Chapter 11 does not put the employees out of work. It lets the company restructure the lethal contracts that force them to design a car, then take 1500 dollars out of it to match the price of the competing Honda or Toyota.
We just bought a flex fuel Tahoe because my wife likes SUVs and we can afford the gas. The auto industry should be willing to do what they have to and that means Chapter 11, to get competitive again. Begging for a bailout went out with British Leyland. Read Bob Zubrin’s book.
For a really large far flung company where there is a lot of necessary executive travel with multiple passengers per flight, it is, in fact, cost effective for the company to operate what amounts to a small airline. Do you really think that it’s the best use of time for the head of a company like GM to get to the airport an hour and a half early to go through security? Or to be standing around waiting for his luggage to come out at baggage claim?
Given how well Congress has been run, this Congressman really has no standing to talk about wasteful spending. What this really is, is Congressional grandstanding without any attempt to actually solve the problem.
Anti-trust law prevents the heads of the big three automakers from being alone together at any time or most other forms of private contact. They might be conspiring to fix prices, etc. Sharing a flight would be out of the question. See what inefficiency results from stupid government rules?
For the record, my opinion is the big 3 should not receive a dime of taxpayer money. They should just bite the bullet and go Chapter 11 and get rid of the UAW contracts that are killing their cost structure in comparison to the Japanese car companies who are successfully building cars in the U.S. with American workers. This is not an automaker bailout, it is a UAW bailout. Once you understand that, the behavior of the Dems is perfectly clear.
“American Axle CEO Richard Dauch was awarded an $8.5 million bonus for defeating the three-month strike by 3,650 auto workers and successfully imposing deep wage and benefit cuts on the company’s hourly workforce.”
Works for me. American Axle may have a chance to survive.
As for the development (or non-development) of ‘green’ cars, I do not care when the government champions a particular concept and throws billions of dollars at it, while practically snubbing alternatives to the alternatives.
Case in point: The favoritism of government for compact fluros, to even writing laws that do away the the reliable incandescent, and structuring lighting requirements that do not take into account the growing and improving LED industry. Those who manufacture and sell compact fluros have been given a near monopoly, even though their light is quite honestly…crappy, and their mercury content adds an environmental hazard that has not been addressed.
BTW…Is a ‘green’ car really ‘environmentally friendly’? Electric cars need to get their electricity from a coal or oil-fired power plant (Unless you have a couple of thousand acres of solar panels at max capacity handy.).
I should have said, ‘I do not care for it’.
The inconsistencies of these people does not persuade me to take their arguments seriously. The leftist illuminati are hardly taking pains to even appear consistent these days. But what legislator is going to call out the heads of companies that keep the UAW afloat?