Blog for Democracy

WTF?

iconCorporate Policy? Really?

Executives from the “Big 3” (yeah, enjoy that nickname while you can, fellas) automakers descended on DC yesterday sniffing around for rescue from their boneheaded business decisions of the past several decades. ABC correspondent, Brian Ross, among others reported that representatives from the three struggling companies arrived in DC on private jets. They didn’t even bother to “jetpool” with just one jet.

So, lawmakers in DC gave the execs some grief about there travel arrangements:

“There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they’re going to be trimming down and streamlining their businesses,” Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

But, to me the most arrogant part of the whole story is this:

Like many other major corporations, all three have policies requiring their CEOs to travel in private jets for safety reasons.

Safety? Seriously, people. How stupid do they think we are? Joe Biden takes Amtrak almost every day, but commercial flights are too risky for some pasty-faced, 60-something, over-paid, clueless, auto executives?

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26 responses to “WTF?”

  1. innerredneckexposed Avatar
    innerredneckexposed

    Jerry: no or at least i hope not.

  2. JerryT Avatar
    JerryT

    Why does anyone assume that “letting them fail” would result in a stronger company forced “to run better”?

    The most likely choices are: 1. Bail them out and make them pay us back through oversight. (Much like a bankruptcy except we don’t call it a bankruptcy), after which they will continue to be stupidly shortsighted, but at least unemployment will only go up to 6.9%.

    2. Let them fail, which means some industrial machinery company in India will buy them and use the name to market their equipment in China meanwhile shutting almost everything in America except a dealer network to sell their backhoes and road pavers which will put Caterpillar and Bid-Well out of business. The Big Three won’t get smarter or better or anything. They will be gone. We will no longer be able to choose any of them. Unemployment will go to 7.6%, Motorcraft, AC Delco, and 875 other parts suppliers also go out of business. Another 150,000 people will lose their homes, collect welfare, and not pay their health insurance. Ahhh, I love the smell of free market solutions in the morning.

    Is Chrysler running better now since the last bailout? Will there be different rules in place after they fail this time? Different idiots in charge?

    Yikes, wait a sec..

    …

    …

    Any known issues with spilled bourbon in the USB port of a laptop?

  3. CatherineAtlanta Avatar
    CatherineAtlanta

    LOL. No, that would be Heaven Can Wait… Then there is Gates of Heaven…

  4. Jules Avatar
    Jules

    Warren Beatty, right?

  5. innerredneckexposed Avatar
    innerredneckexposed

    I remember Heaven’s Gate. They found them behind the jar of Comet.

  6. griftdrift Avatar
    griftdrift

    I hear all these kids have a fancy new doodad called Wikipedia. 😉

  7. CatherineAtlanta Avatar
    CatherineAtlanta

    ROFL. Grift, really? You think anyone here recalls that mess?

  8. griftdrift Avatar
    griftdrift

    Well I can’t wait for the calls for bailout when the next “Heavens Gate” ruins the next United Artists.

  9. odinseye2k Avatar
    odinseye2k

    “Entertainment is a strategic industry?!”

    It’s a very major export and employs a lot of creative and skilled people. Maybe it isn’t big in terms of economic self-sufficiency, but it’s one of the few things we really dominate the world in.

  10. Sarawaraclara Avatar
    Sarawaraclara

    Bankruptcy isn’t the only other option. They could be bought out by overseas manufacturers or a large ownership stake could be sold to someone like Soros or Buffett. The advantage there is that any company that invests their $ in Ford or GM is going to force them to be better run and more profitable, much moreso than the government can.

    I worry about the fallout of the failure of one of the big 3, and hell Ford used to be my best client. I would hate to see them go under. But the fact is that they need a big change one way or another and a cash transfusion alone isn’t going to accomplish that.

  11. CatherineAtlanta Avatar
    CatherineAtlanta

    Frankly, I think they are too big to fail. But, they’ve been too big to fail for decades so for decades we (the big “we”) have chosen not to demand that they take more responsibility for their “too big to fail” status.

    Just how much have they squandered on corporate jets, sky high exec salaries, and other ridiculousness in these decades of “too big to fail”?

    Let’s just say that between the three companies they have 20 execs who have been overpaid by $5 million for 10 years… That’a billion right there.

    Ford’s Mulally refused to move to Detroit from Seattle when he was hired (again, WTF?) so he commutes from Seattle to Detroit every week on the Ford private jet. And takes home over $20 million.

  12. Jules Avatar
    Jules

    I’m not any expert here, but I work for a company whose two biggests market segments are cars and houses..so I can tell you it’s not just about the immediate effect of the big 3. Luckily for us, we also sell internationally to VW, and others.

    We can point to all the fingures we want, but as consumers we’ve abdicated our role entirely in this mess..

    We let ourselves get talked into buying shit cars for 20+ years out of some whacked patriotism, we go to Walmart and buy 10cent less socks, which after a couple years cost us an entire mfg industry right here in GA -Carrolton used to have good jobs until it moved to Mexico.

    The industry leaders just said this am, that if US workers would just accept lower wages and no health care and shitty working conditions they could survive.. WTF

    My CEO flys Delta- all by himself, my congressman flys Delta all by himself, my husband flys Delta all my himself, no body guards, no “security”.

    It’s flipping all about who has the bigger dick/plane.

    The head of GM works in Detriot but lives in Seattle and flys his private jet every weekend, which the company pays for. If you think I want to bail that mess out, you’d be very wrong.

  13. griftdrift Avatar
    griftdrift

    Entertainment is a strategic industry?!

  14. odinseye2k Avatar
    odinseye2k

    I think it is less about “too big to fail” and the fact we need to rethink our capitalism a little bit.

    America has strategic industries (auto, aircraft, software, entertainment) that should be protected because they bring their workers good jobs and build up our middle class. Further, they help us to keep our trade deficits in line and also keep us high on the food chain.

    Textiles and computer chips became parts on much larger systems, but it is hard to think of cars ever becoming commoditized components (other than the fact that everyone has a car).

    Now, I say the auto *industry* should be protected, not necessarily the Big Three. I’d be all for making a carcass on this bailout (let’s say Chrysler) as an example and also an opportunity. Find a batch of 5-10 custom and niche auto manufacturers and recruit them to be the next generation of development tigers. Think Shelby, think Saturn. Let these guys compete to be the ones that eventual supercede and consume the dinosaurs we have now and take on companies like Toyota and Nissan.

    Those niche manufacturers (for part of the bailout cost) would be provided with facilities (an industrial Homestead Act) and also people to help them negotiate mass-production regulations (via the lawyers and engineers that come from the deceased Chrysler).

    Yes, this is government meddling on a major scale. But, it also provides a very interesting opportunity for business leaders and designers to take a fresh crack at the domestic auto production problem and international competitiveness problem.

    May as well take those lemons and make lemonade.

  15. griftdrift Avatar
    griftdrift

    “You should just concede to me.”

    No.

    And you don’t get much more specialized than having a 3rd grade education and the only thing you’ve done for 30 years is operate a sewing machine.

    You know why we alledgely face “trillions” of dollars of tax loss (which sounds a little large to me) because we have insulated these industries while they continue to make bonedheaded decisions and as the beasts grow larger our economy becomes less diverse thus creating “too big to fail” scenarios.

    Too big to fail should be stricken from the lexicon immediately.

  16. Zaid Avatar
    Zaid

    I don’t mind the idea of briefly nationalizing the car industry, but we have to remake it too, not just write gigantic blank checks to it. How about making them have the same efficiency standards as the Japanese and ending their absurd CEO bonuses first?

  17. CatherineAtlanta Avatar
    CatherineAtlanta

    Gotta love IRE.

  18. innerredneckexposed Avatar
    innerredneckexposed

    The republic has survived but at what cost? There are economies and communities that haven’t recovered.

    Most importantly, auto workers are much more specialized than textile workers. From what I understand, you really can’t translate working on the auto line to any other blue collar jobs.

    I also believe the size and scale of the auto workforce v. textile is much larger for the former than the latter but I could be wrong, and also, the money generated favors cars over textiles.

    But Ill tell you what, there is a genuine risk of trillions of dollars in tax revenues about to be lost. That is not fear mongering that is the truth. You can support losing those dollars or not.

    Look, I know we aren’t going to come to a consensus here, ever. You should just concede to me.

  19. PaulaG Avatar
    PaulaG

    JerryT – I recently read on the Internet (and now can’t find it, dagnabit) an article about the top mistakes of American car makers. It was things like refusing to invest in hybrid technology and instead making bigger and bigger SUVs, failing to update the Ford Taurus while the Camry and Accord pulled ahead, etc. So while the pension obligations may be a factor, I think basic bad business decision-making also had a lot to do with the current situation.

    grift – did you happen to hear that NPR piece interviewing former autoworkers at a job center in Dayton, Ohio? Very interesting.

  20. griftdrift Avatar
    griftdrift

    “You have thousands upon thousands of workers who have no other skills than working in auto plants who will probably not get another job that either suits their skill sets or pays as well (Thanks to that marvelous development of capitalism–specialization)”

    They said the same thing about the textile industry and the Republic survived.

    I reluctantly agreed with the financial bailout because I was told the results of not doing it would be catastrophic. So far that pig ain’t flying too far either.

    We can no longer continue to bailout bad behavior – and I mean bad behavior on every side of this mess. If we do, after another 25 years of bad decision making, the bastards will be right back whining again.

    Let them file for bankruptcy. It’s the only government protection they need or deserve.

  21. JerryT Avatar
    JerryT

    It is my understanding that a large part of the problem is the retirement pension obligations these companies have accrued over the years. But isn’t pension money supposed to be kept in a safe investment so that it is available when the time comes to pay out? What investments were they using? And did they tap into those funds along the way for other things?

  22. innerredneckexposed Avatar
    innerredneckexposed

    grift:

    I know your libertarian sensibilities will never allow you to support the bailout but consider this…If the Big 3 go under, the government assumes the cost of all the pensions and benefits given to their workers. You have thousands upon thousands of workers who have no other skills than working in auto plants who will probably not get another job that either suits their skill sets or pays as well (Thanks to that marvelous development of capitalism–specialization), you will lose a sector of our economy that keeps us on a level playing field with the rest of the world, you will lose TRILLIONS of tax dollars per year…

    Look, do you want me to continue with the reasons this bailout will cost us less than losing these companies? I mean, I can.

  23. griftdrift Avatar
    griftdrift

    More evidence of a culture of bad decision making.

    Does it take away from the claim this bailout should be done? ABSOLUTELY.

  24. Zaid Avatar
    Zaid

    Our Democrats would never hand those in power blank checks to do what they wish with little to no oversight. Never!

  25. nicolette Avatar
    nicolette

    it is true that many CEOs are required to use corporate jets when traveling for business purposes. A decent number of large companies even require it when CEO’s travel for personal use (vacations with family etc). For the most part it has to do with safety as well as insurance policies companies take out on their CEOs.

  26. innerredneckexposed Avatar
    innerredneckexposed

    Private jets are safer than commercial. The newest safety measures are always intoroduced in these planes first.

    And actually, this goes against my typically anti-bigwig philosophies, its better for CEOs and other execs to have private jets than to take commercial flights.

    That said…Was it a bad image? Yes. Does it take away anything from the normative claim that this bailout SHOULD BE DONE? No.

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