Automakers Just Can’t Catch A Break
By Justin Gardner | Related entries in Business, Cars, Media
First the media slams them for riding on private jets, and now they find a way to slam them for driving to Washington in hybrid cars.
One thing to think about is the amount of time that they wasted by driving. By turning what would be a 90-minute commercial flight into a 10-hour road-trip they are spending more than eight hours more on travel time.Ford’s Alan Mulally made $17 million in 2007 in salary and incentives, according to the Wall Street Journal. Broken down, that means he makes $1,940 an hour, which means the extra eight hours he spent on the road cost the company $15,525 — one-way.
GM’s Rick Wagoner made $3.8 million in 2007 ($443 per hour) in salary and incentives. Wagoner spending that extra eight hours on the road costs the company $3,531 one way.
Bob Nardelli has not disclosed how much he makes at Chrysler, but judging by the fact that he was making $25 million a year at Home Depot last year, his time is worth a bundle as well.
Chrysler: Nardelli made the trip over a two-day period. Leaving late in the evening on Tuesday, he stayed at a Holiday Inn in Youngstown, Ohio. According the Holiday Inn Web site, it’s about $120 per night, per room. Assuming there were four of them each in their own room that’s about $480 for the stay.
Seriously folks, you can’t have it both ways. I know it’s popular to hate these guys right now, but either they fly on corporate jets and it takes them 2 hours to get somewhere and so a smaller chunk of their salary has been “wasted” or they drive a car, it takes them longer and they use up a bigger (yet, not much bigger) chunk of their salary.
Listen, I think the criticism about the jets was appropriate, even though it was corporate policy and there are security reasons for CEOs to fly instead of drive. But figuring out how much somebody makes and calculating how much they cost their company because they decided to drive is beyond petty. Especially when all of these CEOs have pledged to cut back their salaries to $1.
And by the way Doug…damned if they do and damned if they don’t? How about cutting people a wee bit of slack, especially since you’re a libertarian and believe that the market should determine what they get paid.
This entry was posted on Friday, December 5th, 2008 and is filed under Business, Cars, Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
December 5th, 2008 at 11:17 am
Justin,
My point, and that of the First Read article you linked to, is that this whole idea of driving down from Detroit was a publicity stunt from guys who should be sneaking into town rather than milking this for free media for cars that most Americans can’t afford (the Chevy Volt starts at $ 40,000 a pop, for example).
I don’t care what they get paid, as long as no part of their salary comes from the taxpayers
December 5th, 2008 at 11:47 am
I still really want to get a Volt, myself. I’m a big proponent of alternative fuel vehicles though, so take my opinion with apropriate bias. :)
Honestly, I’m a little miffed that these execs seem to at least be trying to show they’re serious about improving things for their companies, and no one’s putting heat to the UAW. Unions were a wonderful thing. They gave us labor laws and the 40 hour work week. Now its time for the labor laws to take over.
December 5th, 2008 at 12:16 pm
I don’t think its wroth being indignant over this Justin, the media treatment of the whole thing is actually pretty funny. And they deserve a bit of a hard time.
December 5th, 2008 at 12:26 pm
I’m with Justin on this calculation, but with Doug on the bailout. I first heard this calculation on Tuesday – Jeff Macke on CNBC’s fast money compared the relative costs of having the CEO drive in a hybrid vs fly in a private jet to Washington D.C. and concluding that the flying is cheaper based on the exorbitant “hourly” rate of the CEO. I sent them an e-mail making these points (which was ignored – of course):
December 5th, 2008 at 1:49 pm
And exactly why couldn’t they just do what any normal person would? Take a commercial flight? That’s why they got criticized – the driving is not something most people would think sensible.
December 5th, 2008 at 2:59 pm
@Fuzzy – you’re right, they could have flown coach. But, like most Americans, they drove because it’s much, much cheaper. They can’t help what their salaries are right now.
@Doug – First off, ANY thing they would have done would have been scrutinized since people called them out for taking private jets first. So what would you have them do if not drive the products they make to showcase how they’re trying to innovate in the marketplace? Seriously…it’s like these guys literally can’t do anything without you finding something wrong with it.
Also, nearly everything that’s innovative and new starts out as expensive. That doesn’t mean costs can’t be cut.
Again, it seems like they’re damned if they do and damned if they don’t. Cut them some slack already.
December 5th, 2008 at 3:01 pm
These men and the managers that serve under them are largely responsible for the near-destruction of three of America’s most storied companies.
They should be ashamed to appear in public. Heck, if this was Japan, they wouldn’t be appearing in public because of the shame of what they’ve done.
December 5th, 2008 at 6:16 pm
They don’t deserve any slack – but they do deserve some sympathy. They have been publically humiliated going on two weeks:) How come we didn’t see this level of scrutiny for the Wall Street wonders. Those crooks took (and I use that term loosely) $350 billion (with another $350 b on the way) and no one seems to even know where the money went – what’s up with that? $34 billion in loan guaranty’s is expensive (considering the big 3’s combined market cap is less than $5 billion). However, screw the big3 CEO’s this isn’t about them it’s about helping the auto workers and their families. These people need the guaranty’s. CEO’s come and go, they’re a dime a dozen – but the autoworkers and their families are stuck there.
December 5th, 2008 at 9:09 pm
To Aaron’s comment about unions: right on. I have much respect for the historical significance of the unions – their struggles in the early part of the 20th century helped bring about the fair labor laws we have today. But now? Now it’s a racket – it’s a corrupt society rife with cronyism. I agree with Aaron – let the labor laws do their job and let’s be rid of the unions – auto workers, teachers, the whole lot. I’m in no way saying that the UAW caused the Detroit 3 to have the short-sighted business plans they did, but their demands have not been in line with what the market should be paying for decades.
I realize this comment is off-thread a bit, but I had to weigh in. I’m open to any reasonable defense of unions in the 21st century’s global marketplace.
December 5th, 2008 at 9:50 pm
Labor laws? We have labor laws? Have they been being enforced for the last eight years? Of course not. Will any Republican administration enforce them? No. Would “conservatives” whine and cry if someone tries to enforce them? Of course they will. If you think that it is impossible for what unions won for workers to be lost I think you’re seriously underestimating the power of corporate lobbyists.