amid intense criticism in Washington this week on the luxury travel
arrangements of its chief executive even as the company pleads for
federal aid.
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 Co, and Chrysler LLC, who were also
there to plead for $25 billion in federal aid, came under fire too for
flying to Washington in private jets. GM spokesman Tom Wilkinson said
on Friday GM decided to return the aircraft because of a "really
aggressive cutback in travel." 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," Wilkinson said of 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 Wagoner would take if had to travel to
Washington again.
Wagoner and Ford CEO Alan Mulally are required by their companies to
fly by private aircraft for security reasons, according to company
documents filed with the U.S. Securities and Exchange Commission. The
policy for Chrysler CEO Robert Nardelli is not required to be
disclosed because the company is not publicly traded.
Skeptical 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?" Rep. Gary Ackerman, a New York Democrat, asked
the executives at a hearing held by the U.S. 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." Ford did not have an immediate comment on its corporate jet
policy. According to Ford's proxy, CEO Mulally's compensation
included $752,203 in 2007 for personal use of company aircraft. About
two years ago, the head of Ford's North American operations, 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. He now flies
first class on commercial planes.
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