Chutzpah, defined

At the very least, it was a public relations nightmare.  It was most certainly a clear sign that they don't get it.  At worst, it was a vivid display of the kind of management insight - or lack thereof - that has caused the Big Three automakers to teeter on the verge of bankruptcy. I'm referring to yesterday's Congressional appearance by the CEO's of General Motors, Ford and Chrysler, and more specifically to their method of conveyance to said appearance.

The three CEOs flew from Detroit to Washington on their respective corporate jets. Separately.  They didn't even bother to carpool or "jetpool," if you will, in one G4.  No, they each flew on their own jet at a cost of approximately $20,000 per jet.

Get the picture: The CEOs fly in pampered corporate luxury to a meeting where they arrived essentially with hat in hand begging our representatives to give them our tax dollars to rescue the companies that they placed at the edge of collapse with highly questionable leadership and vision.

Any way you look at it, the circumstances surrounding the CEO's congressional appearance showed an enormous amount of chutzpah. It is outrageous effrontery.  And what's worse, the CEOs are totally clueless.  As enraged congressmen called them to task about how they traveled to the meeting, you could see it in the CEO's eyes and read it in their body language: How dare you bring up our corporate jet travel, this has nothing to do with anything.  We are entitled these perks.  We deserve this because of our position and our stature.

Sure, in the grand scheme of things, $60,000 for yesterday's CEO airfare is a tiny drop in the bucket.  Sure it is symbolic.  But symbols mean something.  That's why they are called symbols.  And the symbolism - not to mention the irony - of these arrogant corporate bigwigs arriving in luxurious fashion to beg for taxpayer money was damning. One of the day's most astute observations belonged to Rep. Gary Ackerman (D, NY): “It’s almost like seeing a guy show up at the soup kitchen in a high hat and tuxedo.” 

You know, there's not much that Congress does well, but they are good at sticking their political finger in the air and discerning which way the wind is blowing. Over the last 24 hours they did that and realized that if they just handed these guys a blank check the public would be furious at them. So today, Pelosi, Reid and company were posturing for the cameras, declaring these guys won't get a thin dime until they present Congress with a plan on how they were going to use the 25 billion that Congress has already decided to give them (and that they would already have given to them if it weren't for the outrage over the jets.)

There's another delicious irony here: Congress is taking the Big Three to task for failing to have a plan for how they were going to use taxpayer's money.  Wow. What a concept. Maybe Congress should try that strategy themselves from time to time!

I'm certainly no economist or business consultant, but one wonders where it will end.  A couple months ago, the epicenter of our financial woes appeared to be in the credit markets and specifically in the mortgage market. Fannie Mae, Freddie Mac and AIG were being bailed out and and $700 billion was targeted to buy out so-called toxic loans in institution's portfolios. The underlying problem, however was clearly stupidity - subprime mortgage loans were made and offered to people who could not possibly make the payments on it.  

Now, just weeks later ground zero of the crisis has moved to the Big Three Automakers, we are told we must bail out Ford, GM and Chrysler.  The aforementioned $700 billion has now been redirected from financial institutions to other areas that would benefit taxpayers (read: voters) more directly. And the underlying problem is still stupidity.  The automakers have been on the rope for decades because of quality issues, plus their inability to make cars that people actually want to buy.  

The people at the center of that stupidity were they ones appearing on Capitol Hill yesterday, staring blankly at the lawmaker who just asked them if to raise their hands if they were willing to sell their corporate jet.  They are the ones who have failed to make their companies profitable, and they are now asking you and me to provide the funds to protect those companies from the consequences of their bad business decisions and lack of effective leadership.

Something is just not right about that.  I understand it is a complex issue, and that there are literally millions of jobs hanging in the balance. But the idea of bailing out GM, Ford and Chrysler really, really rubs me the wrong way.  I am a dyed in the wool capitalist who abhors any type of class warfare or wealth envy.  I am grateful for those entrepreneurs and business leaders who create jobs and grow companies.  But looking at the CEOs before congress yesterday, these men who have clearly failed miserably in leading their companies into anything resembling profitability basically asking Congress to use our money to bail them out leads me, along with tens of millions of my countrymen to answer with a resounding "No way."

Comments

[Milan Ford]

Great post. Totally agree with you.
This whole bailout business is a sad thing to see.

[Dtownie Detroit]

I think you are going in the right action by calling the jets a symbol, in the larger scheme of how much money is being spent it's a drop in the bucket. But the media sure made a big deal out of it. And now I've heard the jets have been sold. But I also think about what had these companies done in the past few years to answer the charges brought against them. It seems they have met with labor leaders to get concessions. It seems that the quality of their fleets has gone way up and they've been winning awards. SUVs were a fad, and although it was what people wanted to buy it was shortsighted. And it seems that they've been restructuring. These big companies just more able to force the extremely rapid change needed before this crisis struck.