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Thread: Corporate Expenses - What Were They Thinking?

  1. #1
    Cyburbian Cardinal's avatar
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    Corporate Expenses - What Were They Thinking?

    Yesterday's big news was that Citibank - still on the verge of collapse after taking $45 billion in federal bailout money - will not take delivery of a $50 million corporate jet. The question is why they would have ordered it in the first place. Are corporate executives so important that they can't take a commercial flight? If the average commercial plane ticket (economy) cost $350, the money spent just to purchase this plane would have been enough to cover nearly 143,000 flights. That is likely more than a whole year of plane travel for the entire company. And that does not even factor in the millions more it would take to fuel, maintain, and pilot the plane during the year.Imagine the ego it takes to think that you need to be flown everywhere by private jet at shareholder expense. Management that thinks this way, and the boards that approve such practices, are the problem with businesses today. These people need to be removed!

    Sorry, just gotta vent.
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  2. #2
    Cyburbian mike gurnee's avatar
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    ...but it would create two jobs for the pilots! These types do not care what others think. That is the problem.

  3. #3
    Cyburbian
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    I personally don't mind if the CEOs of these huge firms use private jets. IF the company is financially sound and is still turning a profit, they can do as they wish. However, if the company was bailed out that might be a little different. Yes, one could argue that the plane and its maintenance were being funded by non-government money. However, with so much public anger over MOST types of executive compenesation, I think it would be better for the time being that CEOs of all companies (good and bad) demonstrate more austerity to boost morale among subordinates and shareholders.

    I will agree that executives at AIG going to a spa resort during the bailout or John Thain, CEO of Merril Lynch, spending hundreds of thousands of dollars on decorating his office, after begging to be sold to Bank of America, is just downright stupid. Although Robert Nardelli of Chrysler cut back on the private jet (which he should since he is a struggling automaker) I still don't understand why Daimler hired him in the first place after he screwed things up for Home Depot earlier this decade.
    "This is great, honey. What's the crunchy stuff?"
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  4. #4
    In fairness to Citi, the jet was ordered two years ago. Now, Merrill-Lynch's decision to pay out Billions in Bonuses before they were bought out by BA does peeve me greatly.

    Don't get me started on AIG...
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  5. #5
    Cyburbian SW MI Planner's avatar
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    Quote Originally posted by Gedunker View post
    In fairness to Citi, the jet was ordered two years ago.
    Yah, but regardless of when it was ordered, this type of spending is prime example of their financial ineptitude that shows why the government shouldn't be providing a bailout.

  6. #6
    Cyburbian CJC's avatar
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    Let's hope that Google never needs to be bailed out. People would probably not be too happy at the company's private 767, complete with bedrooms for the two founders:

    http://valleywag.gawker.com/185809/t...gle-jet-mapped

    I'm sure this baby cost at least ten times as much as Citi's ordered jet. I seem to remember Apple buying a couple hundred million dollar jet for Steve Jobs' personal use back in 02 or 03 as a bonus too.
    Last edited by CJC; 28 Jan 2009 at 10:21 AM.
    Two wrongs don't necessarily make a right, but three lefts do.

  7. #7
    Cyburbian Plus Whose Yur Planner's avatar
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    Quote Originally posted by SW MI Planner View post
    Yah, but regardless of when it was ordered, this type of spending is prime example of their financial ineptitude that shows why the government shouldn't be providing a bailout.
    I agree whole-hearterly(sp). I was kinda iffy about the bailout when it was proposed. With the details that have emerged since the bailout-the lack of oversight, the bs the corporations are trying to pull, I am against it. Further, it's done little good. We got snookered on this one.
    When did I go from Luke Skywalker to Obi-Wan Kenobi?

  8. #8
    Cyburbian otterpop's avatar
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    The government's turn-over of our money to these financial wizards to bail them out galls me. If it was necessary, then there should have been serious strings attached. How about making them cut the interest rates on their credit cards, to at least give the American people a thank you for the money?

    We, that is, our government, handed over the money to those troubled banks with little oversight. Then we shamed the car execs and raked the car companies over the coals for their buyout. At least the car execs produce products that at the end of the day are worth something and of some use. Those troubled banks produced nothing but misery - raising the hopes of the poor that they could own their own homes, then snatching it away. Meanwhile they pocketed bonuses for generating all those sub-prime mortgages.

    Both those troubled banks and the Big Three got into the mess they are in because of their bad decisions, pighheadedness and greed.

    Their CEOs should have to take public transit to work and ride Greyhound and Amtrak to their corporate get-aways. When they fly, let them sit in coach with my family. I am sure they will enjoy the warm cup of Pepsi and the small bag of pretzels as much as I do.
    "I am very good at reading women, but I get into trouble for using the Braille method."

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  9. #9
    Cyburbian mgk920's avatar
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    Hey, don't go dissing Gulfstream - they've got a very large and fast-growing base of operations that provides oodles of great, high-paying, highly-skilled jobs here in the Appleton area!



    Mike

  10. #10
    Cyburbian AnvilPartners's avatar
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    I don't have a problem with corporate leaders making some money

    I think it's a great incentive for them to get rich if they can make their companies succeed and create jobs.

    I do, however, have a problem with how much it has gotten out of hand -- it's an issue of how rich is REALLY RICH.

    Example -- a CEO making $30 Million a year, pulls down an hourly rate of $14,400 per hour.

    Think about it -- $577,000.000 PER WEEK.

    In 1/2 day they make median annual wage for a family of 4 in some places.

    That means over the course of a year, that CEO makes what 1,040 individuals would have made that year.

    How many business leaders do you know that make that hefty a contribution to their companies?

    How many business are cutting jobs and salaries right now, so these jokers can continue to pull down this kind of insane wealth?

    None, that I know of...
    "Sometimes you have to get medieval with it...hammer, sparks, sweat, the whole nine yards...so don't forget your asbestos suit."
    Aphorisms on Public Hearings, Planning Guild Handbook (2001).

  11. #11
    Tho I do not work in the public sector....

    It's fun to look at all the inefficiencies of the private sector and all the things they've done wrong and point out that the people who work in the private sector are just inherently not as hard working as the public sector? (isn't that what all the libertarians and free market people have been saying about public employees for decades?)

  12. #12
    Cyburbian DetroitPlanner's avatar
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    You would think that after seeing the beating that auto execs got they would know better. At least auto execs have an excuse for having planes because they have factories and sales all over the world. The same can't be said about banks who do 99 percent of their business domestically.
    We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805

  13. #13
    Cyburbian CJC's avatar
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    Quote Originally posted by DetroitPlanner View post
    You would think that after seeing the beating that auto execs got they would know better. At least auto execs have an excuse for having planes because they have factories and sales all over the world. The same can't be said about banks who do 99 percent of their business domestically.
    Well c'mon, that's not true at all. I would guess that more of Citi's business is/was conducted outside the US than any of the Big Three. They weren't called the "Global Financial Supermarket" for nothing. Most "banking" is not just the branches that you see (many of those factories that you mention were likely financed in part by US-based banks - Morgan Stanley's advertising slogan "World Wise" comes to mind, as they show projects in China, India, and Dubai on the commercial), though it is funny - on all of my travels to South America, Europe, and Asia, a simple rule that I always followed was that a Citi ATM was the most likely to work with my ATM card without any problems - and they're everywhere outside the US (probably only saw more HSBC ATMs overall).
    Two wrongs don't necessarily make a right, but three lefts do.

  14. #14
    Cyburbian
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    Quote Originally posted by otterpop View post
    Those troubled banks produced nothing but misery - raising the hopes of the poor that they could own their own homes, then snatching it away. Meanwhile they pocketed bonuses for generating all those sub-prime mortgages.

    Both those troubled banks and the Big Three got into the mess they are in because of their bad decisions, pighheadedness and greed.
    I partly agree with you on this. The banks snatched the homes away because the people couldn't afford them. Why couldn't they afford them? Because these homeowners bought too much house with little to no money down!!!

    I blame the republicans for having little to no oversight over mortgages/Wall Street and the democrats for pushing for FHA assistance to disadvantaged groups, many who didn't have solid credit histories to begin with. Owning a home is not an entitlement! It is a gift, and it is a priviledge!

    For decades American families have had an unwavering belief that the fair market value of their home will only go up. My parents have a couple of home equity lines of credit, but they would never DARE use it for anything except for serious emergencies such as a tornado or a life-threatening operation, etc. Those lines of CREDIT are only used after all other savings have been depleted, and other assets have been liquidated.

    For years I read these frightening articles about families in boom towns building these huge houses, borrowing against their house for a vacation, education, or a spur-of-the-moment shopping spree, with nothing to show for it except a mountain of debt. Have we all forgotten these stories?!! We now point the finger at Wall Street and the government for not fixing these problems. Many of us are also partly to blame for these serious problems. In these unspeakable times, no smart politician on either side of the aisle would dare point the finger back at the taxpayer for contributing to this mess, although Obama hinted at some of this in his Inagaural Speech.
    "This is great, honey. What's the crunchy stuff?"
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  15. #15
    Cyburbian michaelskis's avatar
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    Yet another reason that I was not a big fan of the bail out. These companies deserve to fail because they donít understand how to run their own business.

    But then again, Nancy Pelosi has a gulf stream jet and congress voted to give them selves raises. Given the state of the economy and knowing that our tax dollars are paying for this crap, I rather the government sell Ďherí jet.
    Not my monkey, not my circus. - Old Polish Proverb

  16. #16
    Cyburbian CJC's avatar
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    Quote Originally posted by michaelskis View post
    But then again, Nancy Pelosi has a gulf stream jet and congress voted to give them selves raises. Given the state of the economy and knowing that our tax dollars are paying for this crap, I rather the government sell ‘her’ jet.
    I personally don't care for Pelosi in a lot of ways, but I don't see one problem with the person third in line to the Presidency to have the safety precautions of not flying public. The Speaker of the House before her did the exact same thing. Here's the fact check on the topic:

    http://www.factcheck.org/askfactchec..._200-seat.html
    Two wrongs don't necessarily make a right, but three lefts do.

  17. #17
    Cyburbian michaelskis's avatar
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    Quote Originally posted by CJC View post
    I personally don't care for Pelosi in a lot of ways, but I don't see one problem with the person third in line to the Presidency to have the safety precautions of not flying public. The Speaker of the House before her did the exact same thing. Here's the fact check on the topic:

    http://www.factcheck.org/askfactchec..._200-seat.html
    I think that private air travel should be limited to the President and Vice President. I don’t think that the speaker (regardless of what party they come from) should have a private jet given the economic mess we are in. Until she is second or first in command (god help us all and may that never… ever… happen), then she should not be flying around the country on her own personal jet. If you’re worried about safety, then perhaps they should travel with some sort of escort and not a personal pilot.

    To make matters worse, Pelosi used the jet last fall for personal use traveling from one book tour stop to another… on the tax payers dime!

    I think that congress getting mad at Citi-Bank is the pot calling the kettle black. Neither of them know how to handle money correctly!
    Not my monkey, not my circus. - Old Polish Proverb

  18. #18
    Cyburbian CJC's avatar
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    Quote Originally posted by michaelskis View post
    I think that private air travel should be limited to the President and Vice President. I don’t think that the speaker (regardless of what party they come from) should have a private jet given the economic mess we are in. Until she is second or first in command (god help us all and may that never… ever… happen), then she should not be flying around the country on her own personal jet. If you’re worried about safety, then perhaps they should travel with some sort of escort and not a personal pilot.

    To make matters worse, Pelosi used the jet last fall for personal use traveling from one book tour stop to another… on the tax payers dime!
    Ok, you need to read that Fact Check link. She only uses the jet (and is only permitted to use it) for travel to and from DC and SF. Her family, if they accompany her, must pay the same amount that a coach ticket would cost. She isn't permitted to use a military plane for any other purpose - only flights from her home in SF to DC for government work. That's it. I haven't seen anything showing that she has used the jet for any other purpose - and certainly not for a "book stop tour".
    Two wrongs don't necessarily make a right, but three lefts do.

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