DETROIT - GENERAL Motors will return two of its leased corporate
jets, and Ford could sell some of its jets after intense criticism
in Washington this week over the travel arrangements of their CEOs,
who went there to plead for a US government bailout.
GM CEO Rick Wagoner was in the capital to testify on the
company's dire financial situation, but his testimony was
overshadowed by irate lawmakers who blasted him for flying on a
private jet to ask for public funds and failing to make personal
sacrifices in exchange for federal assistance.
Chief executives from Ford Motor, and Chrysler, who were also
there to plead for US$25 billion (S$38 billion) in federal aid,
came under fire, too, for flying to Washington in private jets.
GM spokesman Tom Wilkinson said on Friday that GM decided to
return the aircraft because of a 'really aggressive cutback in
travel'. The company, which is in cost-cutting mode, is
scrutinising every trip, he said, but declined to disclose the name
of the company from which it leases the planes.
Mr Wilkinson said the decision to return the leased corporate
jets was made before this week's hearings and that the company in
September returned two other of the seven jets it had at the
beginning of the year.
'There is a perception issue,' Mr Wilkinson said of Mr Wagoner's
travel to Washington on a private jet. 'We need to be very
sensitive to that going forward.' He, however, said the company has
not decided on what mode of transportation Mr Wagoner would take if
had to travel to Washington again.
Mr Wagoner and Ford CEO Alan Mulally are required by their
companies to fly by private aircraft for security reasons,
according to documents filed with the US Securities and Exchange
Commission.
According to Ford's proxy, Mr Mulally was required to use Ford
aircraft for all business and personal air travel in 2007 for
security reasons and his family and guests were allowed to
accompany him.
The arrangement also covers travel by Mr Mulally's wife,
children and guests on company aircraft for personal reasons
without him at company expense upon his request to 'ease the
burden' of moving to Michigan and away from family in Seattle,
according to the proxy.
Ford's proxy said the only other person allowed to use corporate
aircraft for personal reasons is Executive Chairman Bill Ford
Jr.
The policy for Chrysler CEO Robert Nardelli is not required to
be disclosed because the company is private.
Sceptical lawmakers took to task the three CEOs for their
luxurious travel arrangements at congressional committee
hearings.
'Couldn't you have downgraded to first class or something, or
jet-pooled or something to get here?' Representative Gary Ackerman,
a New York Democrat, asked the executives at a hearing held by the
US House Financial Services Committee.
Even Democrats who said they were sympathetic to the automakers'
plight expressed frustration that the executives used private jets
while professing ruthless cost-cutting measures.
A Chrysler spokesman said the automaker also leases or charters
jets. He, however, declined to comment on whether the company was
rethinking the use of private jets for executive travel, saying it
was a 'private matter'.
Late on Friday, Ford said it was exploring options for saving
money on its corporate air travel, including selling the jets it
owns. Ford, which has sold four airplanes and reduced its use of
corporate aircraft by about half since 2005, owns five planes.
Three are used for executive travel and two primarily for marketing
teams.
When asked whether the review was a response to the criticism on
Capitol Hill earlier this week, Ford spokesman Mark Truby said
Ford's 'top priority is to continue to make progress in our
plan'.
'We don't want anything to distract us, but we have been looking
at all of our operations to reduce costs and operate more
efficiently,' Mr Truby said.
According to Ford's proxy, CEO Mulally's compensation included
US$752,203 in 2007 for personal use of company aircraft.
About two years ago, the head of Ford's North American
operations, Mr Mark Fields, gave up use of a corporate jet for
personal travel to his home in Florida after the arrangement came
under criticism at a time when the automaker was losing billions
and slashing jobs.