Beggars Can be Choosers: Auto-Industry Execs Use Private Planes

by D. Cupples |   Back in September, Congress agreed to lend $25 billion to the Big-3 automakers  and some supply companies, purportedly to help them make fuel-efficient cars -- something the Big-3 could and should have done decades ago. 

Yesterday, auto-industry execs testified before Congress, hoping to get another $25 billion. Think Progress reports: 

"Testifying before the House Financial Services Committee, General Motors CEO Rick Wagoner insisted, 'We’re all slashing back' on non-essential expenses, promising, 'We’re going to be dramatically leaner.' The other executives echoed Wagoner’s pledge to be 'leaner' in the future." (Think Progress)

Oh really?  The night before last, ABC News reported that all three CEOs from the Big -3 companies flew to Washington on private jets paid for by shareholders:

"All three CEOs - Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler - exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM's $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone....

"While Wagoner testified, his G4 private jet was parked at Dulles airport. It is just one of a fleet of luxury jets owned by GM that continues to ferry executives around the world despite the company's dire financial straits....

"Wagoner's private jet trip to Washington cost his ailing company an estimated $20,000 roundtrip. In comparison, seats on Northwest Airlines flight 2364 from Detroit to Washington were going online for $288 coach and $837 first class." (ABC)

Then there's the matter of executive pay.  In 2007, GM's CEO Rick Wagoner got a 41% raise (to about $14 million) -- during a year that GM had record losses of about $38 billion. While Mr. Wagoner (and possibly hundreds of other execs and managers) were rewarded with pay raises, the executives laid off a couple thousand workers.

In 2006, Ford had record losses of more than $12 billion.  Yet, the company gave its then-new CEO Alan Mulally $28 million for his first four months on the job. Mr. Mulally's total 2007 compensation was about $21 million.  Four of Ford's executive vice presidents that year collectively took home about $39 million.

In short, just five Ford execs pocketed $60 million after a year of record losses (I don't know how much the hundreds of lower execs and managers pocketed).

I didn't find compensation data for Chrysler's CEO.

It certainly doesn't look as though the executives running America's automakers are particularly frugal or judicious.  Yet, they want another 25 billion tax dollars?  Hmm.

Memeorandum has commentary.

Other Buck Naked Politics Posts:

* Cutting Executive Pay Would Save Jobs

* Senate Considers Another $25 Billion Auto-Industry Bailout: Why?

* Paulson's Op-Ed: Specious Statements and Omissions

*  Are Bailout Funds Being Misused?

* Lehman Execs Redistributed Shareholder Wealth (to Themselves)

* Execs Made Millions While Driving Companies into Ditch