The audacity of the Big Three CEO’s showing up for a 30 billion dollar in Washington handout due to their own mistakes is beyond understanding by most people.
These CEO’s arrives separately in their own private Leer jets cost them $20,000.00 round trip for each person to arrive in Washington and the reason give was for their own security. There have been no recent Al Qaeda threats on automaker CEO’s although some stockholders may want to take a punch at them.
Brian Ross of ABC News did some investigating on the perks of failure especially at GM.
These automakers do not understand that people are losing their homes, their jobs and health care due to the state of the economy.
They tried the Henry Paulson sense of urgency tactic of his initial address to Congress requesting 700 billion dollars immediately with no questions asked of him. There is no guarantee that once they receive this loan as they call it, that layoffs would not occur even after this massive bailout request.
To add insult to injury they gave no specifics, no plan and no details on:
1) How they expected to weather the next several years of a predicted economic downturn when they are burning up cash every day.
2) There were no details on how they will re-design, revamp plants, retool machines to build green cars to complete with Toyota that has become the leader in the industry with the very successful Prius while they were asleep at the wheel.
3) There were no cost spreadsheets, no presentations, no new designs for vehicles they intended to build and no proposals on how this money will turn their companies into profit centers instead of losers.
4) GM needs 12 billion, Ford needs 8 billion and Chrysler needs 7 billion but the CEO’s are not selling their jets, not any of them. GM’s Rick Wagoner stated he would use the money for operating costs but is this just prolonging the agony of bankruptcy a few months later?
Three Automakers Not Giving up Private Jets
Chyrsler’s Nardelli advised that Chrysler is out of cash and health care, pensions and wages will suffer loss if they don’t receive a bailout.
Ford’s Alan Mulally gets paid 28 million dollars and he and his wife only travel on private jets.
Ford has 8 private jets for their executives and still operates a fleet of jets and is only putting a few up for sale, with no plans for reducing these expenses.
5) There was no mention of changing their focus on Hummers, and their business model. There was nothing mentioned about decreasing the number of divisions, or reducing the number of dealerships. GM has 7,000 dealerships compared to Toyota’s streamlined 1,250 dealers.
6) There was no offer to reduce GM’s CEO salary from 16 million to $ 300,000 which is adequate in relation to his productivity.
Three Automakers Not Giving up Private Jets
It is clear that letting the big 3 declare bankruptcy would deter car buyers however there could be a form of bankruptcy which would allow their streamlined restructuring, and surely this means layoffs. But the layoffs should start at the heads of these magnificent failed corporations and there should be no rewards for their failures.
The blame for the financial failure of the big 3 is being aimed at the high wages of union workers
but if you look at a Toyota vehicle such as the Camry and compare it to a Malibu the price is essentially the same at approximately $ 22,370.00. However Toyota is paying less for labor and pocketing higher profits, and have a clear record of producing a better car.
The big three automakers have ignored market trends, and the price of gas all in this past year 2008 gas was selling at up to $5.00 a gallon.
Instead of re-structuring 2 years ago when gas started to rise they built a 2009 Hummer and 2009 Cadillac Escalade that both get on average 14 miles per gallon. This does not give anyone the confidence that their management or projects are anywhere near reality.
The failure to recognize that gas will get more expensive which should have been a warning sign that cars must be built more efficiently and without harm to the environment. The big 3 all ignored those market trends and indicators of where their future as automakers would eventually be in the future.
The automakers must realize that the days of the Chevy Vega are back, and their customers will not buy gas guzzlers again, those days are long gone.
It is not only the automakers are fault but also politicans who have invited foreign countries on our soil to produce products here, while they refuse to buy our products in their country. The imbalance of trade has damaged our manufacturing base to the point where we have become slaves to foreign manufacturers and our money is flowing out of the country to pay for these products. At the same time we are incurring massive debt and borrowing to pay for our mistakes.
It is now weeks later and GM has just announced it will only put out of service 2 of its 5 corporate jets due to lack of use, and they are not selling them off. In the beginning of 2008 GM had a total of 7 private top of the line luxurious jets for their top executives, not only the CEO but other top brass. Seven jets cost millions to maintain and operate on a daily basis and we need to see the bill for these types of expenses to get a grasp of the sense of entitlement of these men.
A last minute word from ABC News is that the three CEO’s have no plans to stop using their private luxurious jets. Good luck on reducing the arrogant Mr. Wagoner’s 16 million dollar salary or take away his G4 36 million dollar personal jet.
You cannot seriously save these corporations without firing these three failures first. The Obama administration will not entrust futile efforts with CEO’s that just don’t get it.
TAGS: Big 3, automakers, GM, Ford, Chrsyler, Toyota, ABC News, Rick Wagoner, Private jets, CEO expenses, luxury GM jets, GM CEO, GM corporate jets, Brian Ross, Senate, Congress, Henry Paulson, ABC CEO private jets, Leer jets.
Posted November 28th, 2008 Updated.