Auto CEOs and Their Private Jets:
[caption id=“attachment_99” align=“alignnone” width=“128” caption=“Chrysler and Ford CEO’s testifying in Washington, 11/19”][/caption]Much hay is being made over the fact that the leaders of the Big Three U.S. auto makers utilized their private jets to travel to the hearings discussing the potential bailout of the auto industry. One member of congress highlighted it as another example of corporate excess and likened it to the AIG Retreat last month. I disagree.
A private jet is a true and valuable business tool. Use of a private aircraft, either in-house or via private jet charter, allows for complete schedule control, flexibility, privacy and security, and efficient and productive use of travel time. What do you supposed would have been said by the lawmakers who so smugly demanded to know why the CEOs did not fly via commercial airlines, when, having done so, one of them missed the flight, or the flight was delayed so long as to postpone the hearing? Would there have been talk of how lightly the CEOs were taking the situation? Use of the corporate Gulfstream was the most certain way to guarantee that the company leaders would be at a hearing to discuss one of the most important times in the history of their respective corporations. While the AIG Corporate Conference could have been held anywhere and certainly without the uses of hundreds of thousands of dollars in spa treatments and golf outings, getting the major decision-makers together to discuss the best use of bailout money was vitally necessary to the health and future of the company. The same can also be said of this situation.
There are, also, security and privacy issues at hand here. Most major corporations forbid senior executives to fly aboard commercial airlines, because of the higher risk of the unknown. For example, who is on the plane with our CEO? When did the pilot fly last? Is the crew fatigued from the last flight? Has the maintenance been performed on this aircraft correctly? A corporate flight crew/department knows the answers to all of these questions. A multibillion dollar company in the deep throes of economic peril cannot take the risk of losing its Chief Operating Officer to a risk that could have been mitigated by using a private jet. Finally, while flying aboard a commercial airliner is certainly cheaper, it would simply have been impossible for the CEOs to do any meaningful preparation or have any meaningful discussions regarding the hearing they were about to attend.
I contend that profligate and unnecessary use of private aviation by companies in economic turmoil is not only irresponsible but shameful, however by enabling the key people to visit clients, tour production facilities, perform road-shows, and help sales forces reach new markets smart and judicious use of the company Gulfstream or Hawker will add significant value to the bottom line.