Leaving on a jet plane

There's so many times I've let you down
So many times I've played around
I tell you now, they don't mean a thing

I'm leavin' on a jet plane
I don't know when I'll be back again
Oh, babe, I hate to go.

-- [I'm] Leaving on a jet plane
Peter, Paul & Mary

With some cynically saying the Obama administration returns Kumbaya to the national stage, let us not forget Peter, Paul and Mary and the hootenanny days, because their jet plane song (let's all sing along) seems to have united even the Washington Post and FoxNews!

Here's FoxNews:

Obama economic advisor Austin Goolsbee criticized the auto industry for granting its executives multi-million dollar paychecks while the companies fell under.

"The fact that these guys flew in private jets to Washington, and it seemed like it was the first they heard of it: "what is your plan to restructure your companies?" They said, you know, "we'll have to get back to you." that was crazy," Goolsbee said on CBS' "Face the Nation."

Here's Dana Millbank in WaPo:

There are 24 daily nonstop flights from Detroit to the Washington area. Richard Wagoner, Alan Mulally and Robert Nardelli probably should have taken one of them.

Instead, the chief executives of the Big Three automakers opted to fly their company jets to the capital for their hearings this week before the Senate and House -- an ill-timed display of corporate excess for a trio of executives begging for an additional $25 billion from the public trough this week.

"There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands," Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday.

Other voices were also chiming in from

Miami Herald:

You'd be hard pressed to find three guys more disconnected from Main Street and less qualified to talk about the plight of the average auto worker. According to The Washington Post, Wagoner's total compensation from GM last year was $15.7 million. Mulally collected $21.7 million from Ford.

When asked by Rep. Peter Roskam of Illinois if he'd be willing to cut his salary to $1 a year, as Chrysler's Nardelli has said he would do, Mulally replied: ``I think I'm okay where I am.''

Spoken like a true capitalist. Now give that man a big fat government bailout! As for Nardelli's benevolent offer to accept only a buck-a-year in compensation, he could surely afford it. In January 2007, he quit abruptly after six years as CEO of Home Depot Inc., where he'd been paid as much as $38 million annually.

Before leaving the company, Nardelli negotiated a ''retirement'' package worth $210 million, a stunningly obscene sum even in the surreal realm of corporate parachutes.

Nobody was asking that the CEOs apologize for their personal wealth and career successes. But when the corporation that rewards you so extravagantly is going down the toilet, a little humility and sensitivity is in order.

The generosity of Americans doesn't -- and shouldn't -- extend to sustaining the ethereal lifestyles of multimillionaires. Lots of executives fly private, but not to their own pity parties.

Bailouts are meant to save jobs, not corporate chariots.

Fox' Bill O'Reilly in Townhall.com:

Leaders of the three major American car companies showed up on Capitol Hill this week stating that if billions in government loans were not forthcoming, they would go bankrupt. And how did many of these executives get to Washington from Detroit? By private jet, of course.

They want charity from hardworking Americans who are getting pounded in a chaotic economy primarily caused by irresponsible businesspeople.

Both political parties are at fault, and we should tell them there will be no loans to private industry that uses private jets. The scam stops here.

Boston Herald:

Obama adviser David Axelrod says Congress is sending the right signal to the industry.

"I hope that they will come back to Washington in early December — on commercial flights — with a plan," he said.

Chicago Tribune:

This is not a good time to be Detroit, the city that put the world on wheels, and now the city whose corporate kingpins are begging Washington for a $25 billion bailout.

In fact, the timing couldn't be worse. All that pent-up public anger over gas prices, cars that get lousy mileage, autoworkers who get paid for not working and executives who fly on private jets and get fat bonuses while their companies suffer have come together to forcefully pose the question from public and Congressional critics: Why not let the whole rotten bunch of domestic automakers go belly up?

Meanwhile, the NYT looks back, not even as far as the Chrysler bail-out, which happened back in the days of dinosaurs when Guambat was in law school. Guambat was taking a corporation law class and his professor began one class with "Today we will discuss non-profit corporations and, no, I am not talking about Chrysler". The NYT only went back to the 1990's in this report:

Beginning in late 1993, the federal government contributed more than $1.25 billion to the [Partnership for a New Generation of Vehicles] program, an effort that began in late 1993 to make the automakers more competitive by assisting them in developing, by 2004, a prototype midsize sedan that would go 80 miles on a gallon of gas, with no loss of acceleration, size or carrying capacity.

The money that the industry is seeking now is not for research and development, as the partnership and a small successor program were. Congress has already approved $25 billion to finance an Energy Department program for car companies and their suppliers to retool factories for new fuel-efficient models. Detroit is also seeking additional loans in the form of working capital. But the history of federal help for Detroit is not good, experts say.

At the Natural Resources Defense Council, Roland Hwang, a vehicles expert, said the main effects of the program were to deflect pressure on Detroit to make cleaner and more fuel-efficient vehicles right away, and to prod Japanese manufacturers into speeding up their own efforts, which resulted in the Prius and other successful models.

Michael P. Walsh, an air pollution consultant who was in charge of efforts by the Environmental Protection Agency to limit vehicle emissions, said the research and development programs aided by Washington “were basically big failures in that they didn’t really force the industry to bring anything to the marketplace.”

Mr. Hwang said other policies could help the companies and move them in the right direction. The tax break of up to $4,000 per vehicle given to buyers of high-mileage hybrids is “as good as cash in the bank” for the car companies, he said.

It is interesting to point out that the automobile industry in the US was a big beneficiary of the recent stock market romp, and that the industry Executives didn't fly in to Washington offering to share in their unexpected and unearned windfall. Guambat posted from this story 2 years ago:

* The best stock rise for the year on the DOW was by a company who's rise was almost double the rise of the second best stock on the DOW.

* This stock went up 64.52% this year, and last year everyone was wondering if it would go bankrupt. This stock that went up 64.52% is a money losing company ... and it has been the most significant driver in the DOW reaching new highs! This same company's stock price has consistently made "lower tops and lower bottoms" since 2002 ... in other words, it is in a long term down trend.

* The stock's high on May 31st, 2002 was $68.17. At Noon yesterday, it was $31.87 ... a drop of 53.2% from May 2002, yet it is the best contributing stock to the DOW's rise this year by nearly a factor of 2 compared to the DOW's next best stock. By the way, the DOW is up 14.3% since its May 31st. 2002 monthly high.

* Oh ... one more tidbit. This company's second quarter Revenues were $53,669,000,000. and it still lost $3.37 billion dollars for the quarter with a -$5.97 EPS. And its reward for that performance was to be the #1 stock on the Dow Jones Industrials. (See GM's Earnings per Share chart and historical price chart below.)

* What company are we talking about? General Motors.

Much of GM's price increase was because of billionaire investor Kirk Kerkorian who owned 9.9 percent of GM shares and then considered raising his stake to 12 percent. This week Kerkorian signaled he would not acquire more stock. And, some of GM's rise centered around speculation whether a North American turnaround is really under way for General Motors ... or not.

If it turns out that Kirk Kerkorian really is giving up his interest in controlling GM, then that means he would sell this 9% of GM and the stock will once again move down to new lows.

The point of discussing all of this, is the new highs for the DOW and what effect GM's price had on it. By my calculations yesterday, if GM's poor EPS performance resulted in the price of the stock being at neutral (a zero % gain for the year), then the DOW's price yesterday would have been 11616 ... which would have meant the DOW never reached its "all time high".

But the problem is too big to ignore if not too big to fail, and the politicians are going to have to sit down and hammer out a deal of some kind, as noted in this story from far away New Zealand, as the whole world watches:

Senator Carl Levin, a Michigan Democrat, along with Republican Senators Kit Bond of Missouri and George Voinovich of Ohio are trying to broker an alternative that could provide bridge loans or a guarantee that the fuel-efficiency loan fund ultimately would be replenished.

Negotiators were discussing a scaled-down aid package of US$5 billion to US$8 billion to help the car makers survive through year's end. But it was unclear whether any progress could be made. Democrats strongly oppose letting the car companies tap into the energy loans for short-term cash-flow needs.

Now, if only I had a hammer ....