There's been plenty of outrage in the last 24 hours since the NY Daily News reported that CitiGroup, a recipient of about $45 billion in bailout money from the taxpayers, has ordered a spiffy $50 million jet to haul its execs around.
"To permit Citigroup to purchase a plush plane -- foreign-built no less -- while domestic auto companies are being required to sell off their jets is a ridiculous double standard," said Sen. Carl Levin, D-Michigan, yesterday.
Who's responsible for allowing companies that receive taxpayer-funded bailouts to spend it on luxury business jets? The U.S. Senate.
Two weeks ago, the Senate removed a provision that would bar companies receiving bailout cash from buying new jets, and the reason shows the left-hand-doesn't-know-what-the-right-hand-is-doing nature of economic stimulus.
Kansas is the center of the domestic general aviation industry. It, too, is hurting. If the companies there don't sell business jets, people lose jobs. Cessna, for example, cut 2,200 people last week. The Kansas senatorial legislation lobbied -- hard -- to get the provision removed from the TARP package.
This morning, Citi announced it would not buy the French-made jet afterall.
Granted the foreign-made component of the issue is part of the outrage, but in general it's based on buying a jet at all. So on the one end, economic stimulus is intended to help businesses build business jets, and on the other end, other companies -- also receiving taxpayers funds -- are criticized for buying the product the other soon-to-be-government-subsidized business sells. It's not in the best interest of taxpayers, they say.
I can't read this kind of stuff so early in the morning, it makes me want to tear out my hair.
While it may seem to be a luxury to have a corporate plane, some companies actually save money by having one. Granted, they could lease one when needed, but if they need one regularly it may be better to own.
I work for an ad agency that had a client away from major airports. It was actually cheaper to take a private plane ride than a commercial plane and it saved time too because we ended up very close to the client.
It is the same for any business that has out of the way locations. We should not judge the purchase without understanding the value to the organization. Certainly in our bailout money we should request that if a U. S. product is available for at or near the price of a foreign item they should buy U. S.
My reply to this post is related to the memory story too. Turns out I’m really good at forgetting.
I made a point a while back replying to a news cut blog, but don’t recall the precise story. It might have been when the auto executives flew to Washington DC to beg for money. Anyway the point was: these guys may actually save money flying around on corporate jets, but they just don’t seem to understand the public relations image of taking money from hard working Americans and using it to buy a $50 million luxury that NO AMERICAN is even employed to build.
These guys seem so dense! How do they get and hold their job?