Comments on: Buddy, Can You Spare A …….. Gulfstream?

By: Boy Named Sous

Boy Named Sous — Fri, 21 Nov 2008 02:38:55 +0000

I’m firmly in the “Let ‘Em Fail” camp, but not because of a private jet flight. And I’m not in that camp despite the workers — they’re as much to blame for the fiasco at the Big Three as management is — the UAW has used its clout for years to pad workers’ salaries, and with them their own share through dues. The quality of vehicles and the innovation behind them has failedto improve at the same rate as the Europeans and Asians, and perhaps that IS the fault of Management, but the PRICE of those vehicles has certainly kept pace, and I’m left wondering how much of that is because of Labor and the per hour wages of sutoworkers.

By: Gaius

Gaius — Fri, 21 Nov 2008 02:02:14 +0000

Yes, mathematically it makes sense. From a PR standpoint, it is a disaster. Period. Are these the people who have an ounce of credibility when they promise a turnaround if we only give them our money?

I think not.

The problem here is that it takes away from the donning of sackcloth and ashes when the one doing the donning emerges from a limousine – or a Gulfstream – to do penance.

By: Woodsprite

Woodsprite — Fri, 21 Nov 2008 00:01:59 +0000

I’m pretty far into the ‘let em fail’ camp, so I hate to be defending these guys. In this case the whole corporate jets thing is bad PR, but probably good business. The quoted $20,000 cost of the flight is WAY off since they already own the jets and pay the flight staff. With what these guys get paid, the difference in flight costs of the jet vs. commercial tickets for them and their assistants is easily covered by the two+ hours they save at each end not having to wait in airport lines.

Last minute bookings on Delta for a first class ticket Detroit to DC runs over $2200. Figure three assistants (a Fortune 500 CEO never travels alone) and they’d pay >$8800 for tickets. The incremental cost of flying the jet they already own (instead of leaving it parked) is going to be that or less. A $10 million annual salary means the CEO is worth $4800/hr and having him doing something other than waiting in line at the airport for two hours at each end is worth $19,000. So going commercial is going to cost over $27,800 once you factor in the CEO time (probably closer to $30K including the assistants). Time = money.

By: Bleepless

Bleepless — Thu, 20 Nov 2008 22:37:40 +0000

Plumb Bob, you are right about the numbers, but sticking it to “our team” rather than to the workers would be a nice place to start.

By: martian

martian — Thu, 20 Nov 2008 20:44:07 +0000

At least the CEO of Chrysler had enough sense to state that he is planning on working for the sum of $1.00 in salary for the next year. When the CEOs of GM and Ford were asked if they would be willing to pony up and do the same, the response was a politley phrased “no way, Jose!”

I’m on the “let ‘m fail” wagon myself. Make them go through reorganization, fire alll of the top and even middle management people who managed them into this sorry state, and bring in people with proven management track records from other industries to whip them into shape. If they survive reorganization they should come out the other side leaner, meaner and ready to compete on the world market.

By: Plumb Bob

Plumb Bob — Thu, 20 Nov 2008 11:44:29 +0000

Bleepless, millions per month would do nothing. GM has been losing $1 billion per month since 1998.

Their payroll structure is far too heavy from top to bottom, their benefits and pensions are killing them, they have to offer enormous sales incentives just to get consumers to buy their crappy cars, and their distribution network (all those dealerships) is way too expensive. Meanwhile, they’ve spent the last decade retooling their plants and products so they can now say they have the same manufacturing efficiency as the Japanese. In other words, they’ve been losing money for a decade and steadfastly ignoring the business problems.

On a different note, just how long do you suppose the US government is going to be able to continue to write big checks before international buyers of T-bills start putting their money into yen, yuan, and euros instead?

The Left genuinely believes money falls from the sky (so, apparently, does George W. Bush, but that’s for a different comment.)

By: Bleepless

Bleepless — Thu, 20 Nov 2008 02:30:27 +0000

Something we do not know is the “shape” of each company. My suspicion would be that there are way too many executives and middle-management types. A little purge might save millions per month. This crap about the virtues and strengths of “our team” is very strange: either these people are irrelevant, or they are complicit in the decisions which have brought about the present situation.

By: bill-tb

bill-tb — Thu, 20 Nov 2008 00:00:15 +0000

With each passing day I continue to think we are going to crash really hard.