No bailout without hybrid cars!

Amid the $35 billion bailout pleas from Congress this week, Time’s Bill Saporito makes a case for the Big 3 CEO’s jetsetting ways and explains exactly why they deserve to fly private jets to their destinations.

 Read Bill Saporito’s defense of the Big 3 CEOs expensive travel habits after the break!

“…after the story broke on Nov. 19 that [GM, Ford and Chrysler CEOs] had flown their “luxurious” aircraft to Washington to beg for $25 billion in loans to keep their companies afloat…Washington was outraged at the extravagance. Columnists and comics were ever so grateful for the gift. “I mean, couldn’t you all have downgraded to first class or jet-pooled or something to get here?” whined Representative Gary Ackerman of New York.”

“It was pointed out that the three could have flown commercial that morning for something like $212 each.”

“But wouldn’t this be a case of America’s worst-run manufacturing companies relying on America’s worst-run service companies? There’d be a 50% to 75% chance of the CEOs showing up on time. What are you supposed to do, call Congress and tell them you’re on a gate hold?

We won’t even discuss the amount of CO2 that’s released into the atmosphere thanks to private jet travel, or how inefficient and wasteful it is to fly one person across the country, or how incredibly expensive it is. What we should be discussing is why these CEOs are paid millions of dollars per year when their companies are failing? What are they doing all day?

“ABC milked the story for all it was worth, as any news organization would do. But ABC’s VIPs are not strangers to corporate jets.”

I’m not sure what kind of a fallacy this is, but I’m pretty sure that it is one. ABC CEOs are flying private jets because their companies aren’t bankrupt! Duh!

“But the issue here is that most of the Fortune 500 boards require the boss to fly in the corporate jet. And why not? What’s the point of achieving the big corner office, knifing all those people on your way to the top, if you don’t have the ultimate travel ticket?…That should be no less true for the Detroit Three.”

Of course CEOs should be treated well, showered with praise and occasional bonuses. It’s certainly a no-brainer that when a company is doing well, those that are working hard to increase profitability should be rewarded. But when a company is on the brink of filing for bankruptcy, there have to be cutbacks on financial rewards and incentives.

“What really ticks us off is not that the Detroit Three flew private on a begging mission. It’s that we have to fly commercial, and they don’t.”

Wrong. The public is upset that GM, Ford and Chrysler executives are being paid $20 million a year (or more) – meanwhile, their companies are failing, thousands of workers are now unemployed, and the taxpayers have to pay for the bailout.

“Those complaining about the extravagant cost of winging CEOs around the world are also forgetting about the extravagant cost of CEOs…The shareholders paid Time-Warner CEO Jeff Bewkes $19.6 million last year. Based on a 40-hour week…his hourly cost is about $9,400…If he’s not on time, he’s cooling his heels at JFK, burning the shareholders’ money…We’re not paying you to sit around airports reading People.”

Flying CEOs is insanely expensive only because they’re being paid too much for what they do. If the executives’ salaries were decreased, let’s say to a reasonable $1-5 million, then their time would be worth significantly less. (I’m not saying CEOs don’t ever need to fly in private jets. And no one really needs $20 million dollars to support themselves, their families and a reasonable lifestyle.)

The only way these companies should be able to get a bailout is by promising (in writing) to build only hybrid cars, the executives have to forfeit their bonuses and agree to be paid $1a year. Most importantly, the GM, Ford and Chrysler employees cannot be laid off or fired, because then what would be the point of the bailout? 

What do you think of the Big 3 bailout proposal? Let us know in the comments below!

Source: Bill Saporito from Time Magazine

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