(Adds Ford comment on its corporate jets, details from Ford
proxy on executive)
By Poornima Gupta
DETROIT Nov 21 General Motors Corp(GM.N) will
return two of its leased corporate jets, and Ford could sell
some of its jets after intense criticism in Washington this
week over the travel arrangements of their CEOs, who went there
to plead for a U.S. government bailout.
GM CEO Rick Wagoner was in the capital to testify on the
company's dire financial situation, but his testimony was
overshadowed by irate lawmakers who blasted him for flying on a
private jet to ask for public funds and failing to make
personal sacrifices in exchange for federal assistance.
Chief executives from Ford Motor Co (F.N), and Chrysler
LLC, who were also there to plead for $25 billion in federal
aid, came under fire, too, for flying to Washington in private
GM spokesman Tom Wilkinson said on Friday that GM decided
to return the aircraft ecause of a "really aggressive cutback
The company, which is in cost-cutting mode, is scrutinizing
every trip, he said, but declined to disclose the name of the
company from which it leases the planes.
Wilkinson said the decision to return the leased corporate
jets was made before this week's hearings and that the company
in September returned two other of the seven jets it had at the
beginning of the year.
"There is a perception issue," Wilkinson said of Wagoner's
travel to Washington on a private jet. "We need to be very
sensitive to that going forward."
He, however, said the company has not decided on what mode
of transportation Wagoner would take if had to travel to
Wagoner and Ford CEO Alan Mulally are required by their
companies to fly by private aircraft for security reasons,
according to documents filed with the U.S. Securities and
According to Ford's proxy, Mulally was required to use Ford
aircraft for all business and personal air travel in 2007 for
security reasons and his family and guests were allowed to
The arrangement also covers travel by Mulally's wife,
children and guests on company aircraft for personal reasons
without him at company expense upon his request to "ease the
burden" of moving to Michigan and away from family in Seattle,
according to the proxy.
Ford's proxy said the only other person allowed to use
corporate aircraft for personal reasons is Executive Chairman
Bill Ford Jr.
The policy for Chrysler [CBS.UL] CEO Robert Nardelli is not
required to be disclosed because the company is private.
Skeptical lawmakers took to task the three CEOs for their
luxurious travel arrangements at congressional committee
"Couldn't you have downgraded to first class or something,
or jet-pooled or something to get here?" Rep. Gary Ackerman, a
New York Democrat, asked the executives at a hearing held by
the U.S. House Financial Services Committee.
Even Democrats who said they were sympathetic to the
automakers' plight expressed frustration that the executives
used private jets while professing ruthless cost-cutting
A Chrysler spokesman said the automaker also leases or
charters jets. He, however, declined to comment on whether the
company was rethinking the use of private jets for executive
travel, saying it was a "private matter."
Late on Friday, Ford said it was exploring options for
saving money on its corporate air travel, including selling the
jets it owns. Ford, which has sold four airplanes and reduced
its use of corporate aircraft by about half since 2005, owns
five planes. Three are used for executive travel and two
primarily for marketing teams.
When asked whether the review was a response to the
criticism on Capitol Hill earlier this week, Ford spokesman
Mark Truby s
aid Ford's "top priority is to continue to make progress in our
"We don't want anything to distract us, but we have been
king at all of our operations to reduce costs and operate more
fficiently," Truby said.
According to Ford's proxy, CEO Mulally's compensation
included $752,203 in 2007 for personal use of company
About two years ago, the head of Ford's North American
operations, Mark Fields, gave up use of a corporate jet for
personal travel to his home in Florida after the arrangement
came under criticism at a time when the automaker was losing
billions and slashing jobs.
He now flies first class on commercial planes.
(Additional reporting by David Bailey, editing by Dave