GM has announced that it plans to give up two of its five corporate jets. Earlier this year, the company had seven leased jets and the troubled automaker will soon be down to three. This comes shortly after the CEO received a lot of criticism for using a private jet to travel to Washington and ask Congress for a $25 billion bailout.
The company maintains that its executives are required by its Board to use corporate jets for security reasons and that this practice is common with other companies. While it is true that other companies lease private aircraft, these companies are not asking for a $25 billion taxpayer bailout.
Even though the company is making a move in the right direction by getting rid of some of its private jets, the company still doesn’t get it. Their cost structure is out of whack with its competition due to years of mismanagement and giving up two planes isn’t going to cut it.
Perhaps it’s time to let these companies reorganize under bankruptcy, bring in new management teams (including a new Boards), renegotiate their contracts, and make the companies competitive again. The government can assist with bankruptcy reorganization by backing car warranties, and passing regulation to prevent forced liquidations. Government can also invest in infrastructure and job training for displaced workers.
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Filed under: consumer, current events, economy | Tagged: current events, economy, John Patrick Kreiss, Politics
