In November 2008, with the global economy in meltdown, US car makers GM and Chrysler were on the brink of filing for bankruptcy protection and desperately needed government help. Hundreds of thousands of jobs were at stake, and the wider US economy, the global car market and Ford – if Detroit and its supplier base imploded – were set for massive collateral damage.
With a $25 billion loan package being championed by incoming president Barack Obama but stalled by the outgoing George W Bush, the bosses of the big three came to Washington to plead their case.
But the three: Alan Mulally of Ford, Rick Wagoner of GM and Chrysler’s Robert Nardelli, made a catastrophic PR blunder: they each flew to Washington on their private jets, at a cost of around $20,000 against the 500 bucks of a commercial flight. It was a masterstroke of miscalculation, demonstrating that the men in suits hadn’t grasped the scale of the disaster unfolding before them.
As they stood in front of the House Financial Services Committee, however, reality bit. ‘There is a delicious irony seeing private luxury jets flying in and people stepping off them with cups in their hand, saying that they’re going to be streamlining their businesses,’ said Senator Gary Ackerman. ‘It’s like seeing a guy show up at a soup kitchen in high hat and tuxedo.’ Senator Brad Sherman asked the three to raise their hands if they flew here commercial. ‘Let the record show that no hands went up,’ he said.
The government did eventually bail out GM and Chrysler, at a total cost of $80m over four years, taking them over in March 2009, forcing Wagoner out and instigating Chrysler’s takeover by Fiat. But the jet scandal remains as a monument to the perils of corporate insincerity.
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