Ford CEO to drive to loan hearings
Posted on Tuesday, December 2, 2008
Ford Motor Co. Chief Executive Officer Alan Mulally will drive to Washington for hearings on an industry loan package after members of Congress criticized automaker CEOs for flying corporate jets last month.
Mulally is driving to the sessions scheduled to begin Thursday, according to an e-mail Monday from Mark Truby, a spokesman for Dearborn, Mich.-based Ford. Truby didn’t elaborate.
It is safe to assume General Motors Corp. CEO Rick Wagoner won’t use a company plane, a spokesman, Tony Cervone, wrote in an e-mail, saying he couldn’t give more details for security reasons. A Chrysler LLC spokesman, Katie Hepler, declined to say immediately how Robert Nardelli will travel.
Avoiding private jets would allow Mulally and Wagoner to show they heeded critics during Senate and House hearings on $ 25 billion in loans to help their companies survive. Opponents of the loans attacked the planes as symbols of industry arrogance.
Ford said it is considering selling its five jets, three of which are used for executive travel. GM said Wednesday that two of its seven planes are being sold and two are being listed for sale. The Detroitbased automaker also asked aviation regulators to block the public’s ability to track a leased plane it uses, without saying why.
Teams of executives at GM, Ford and Chrysler worked through the Thanksgiving weekend drafting plans outlining deeper cuts and new or accelerated environmental initiatives by today’s deadline set by congressional leaders.
A weak auto sales report expected this week will likely underscore the urgency of their pleas for bridge financing to keep their companies going through the next few months. Industry analysts predict sales fell in November to 25-year lows.
GM’s board met Sunday and met again Monday to review the automaker’s plan, which will include debt-restructuring measures, more white-collar job cuts as well as concessions from hourly workers.
A person familiar with the situation said the company was considering the elimination of as many as four of its eight brands. GM did not comment Sunday on speculation.
The United Auto Workers union would consider new concessions to help the industry obtain federal loans, UAW President Ron Gettelfinger said Sunday.
In turn, the automakers are expected to address hot-button issues, such as the executives’ compensation packages and their use of private jets, in their plans. Lawmakers criticized those perks.
President-elect Barack Obama has weighed in too, telling Barbara Walters last week that he thought the executives “were a little tone deaf to what’s happening in America right now.”
“When the automakers are getting paid far more than their counterparts at Toyota, or at Honda, and yet they’re losing money a lot faster than Japanese automakers are, that tells me that they’re not seeing what’s going on out there,” Obama said.
Top executive salaries account for a small fraction of a company’s costs, but they’re “symbolically important,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor. “I would not go there without taking some kind of visible cuts.”
Cole said he wasn’t expecting dramatic announcements. The new plans are “not going to differ a whole lot from what they were planning to do anyway,” he said. Information for this article was contributed by Alex Ortolani of Bloomberg News and Christine Tierney and David Shepardson of The Detroit News.
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