GM Corp. Planes Down To Three From Seven - BusinessWeek
General Motors today said it reduced its fleet of corporate jets from five to three. The struggling automaker drew fire this week from Congress when the CEOs of all three U.S. automakers flew in private jets to Washington DC to ask for tax-payer funded loans to help them avoid bankruptcy. GM started the year with seven jets.
GM spokesman Tom Wilkinson said the reduction in the fleet was planned before this week’s Congressional hearings. Several members of Congress chided the CEOs for not sacrificing fat-cat perqs at a time when their companies are losing big money and are asking the public to help bail them out.
Wilkinson said GM’s corporate by-laws require the CEO and several members of the company’s top management to fly privately for “security reasons.” But that argument may not hold water for very much longer. Wilkinson said the company has now cut four leased planes from the fleet because of a reduction in white collar headcount, and a dramatic cutback in travel.
Bill de Decker, president of Conklin & de Decker, an aviation information company, projected that the cost of operating a corporate jet, such as the widely used Gulfstream 5, is about $3,850 per hour, mostly for jet fuel but also crew expenses, airport fees and other expenses. So the round trip to Washington DC comes to about $15,000.
The automakers were turned down for a $25 billion loan this week.
They have to give Congress a detailed report by Dec. 2 outlining how they will spend the money, how much they need, and how it will keep them viable so that tax-payers can be expected to get paid back.
In light of the negative attention on private planes this week, it is likely that the CEOs will find another way to get to Washington for the Dec. 8 hearings that will determine whether or not they get the loans.
It is a lock that members of Congress are going to be looking for evidence in the report and in the hearings that the companies and their employees are willing to make major sacrifices while the automakers are losing big money and being kept afloat by the tax payers.
That will put Ford CEO Alan Mulally on the hot-seat as well. He not only gets to use Ford’s corporate plane to visit his family home in Washington State, but his wife also gets to use it to go back and forth between the Seattle area and Dearborn, MI where Mulally works.