Wednesday, December 10, 2008

Reps Gone Wild! Or, The Sad Saga of Congress & Detroit

OK, there's no getting around this image breaker, so let's get it out of the way right up front.

When the head men of Detroit's Big Three Automakers headed to D.C. in November, those hats they had in hand spent the trip in the coat closet of three large-cabin business jets. They didn't mean for it to look the way it looked -- callous, pampered execs so filled with the hubris of self-importance that they just couldn't help but pick the company jet without thinking of how it looked.

Call it force of habit; call it short sighted. Some of my pilot friends -- many of whom fly such executive jets for their weekly rice bowl -- call it "stupid, plain and simple stupid."

And watching a variety of Members of Congress take turns flailing the flesh of those poor, suffering multimillionaires was, well, alternatively painful and maddening.

The same Big Three Automaker head men, only slightly more contrite, last week returned to address those same Congressional panels, this time with something akin to actual plans for their own recovery. And with memories of the prior visit's loss of flesh still fresh in their minds, they all noted right up front that they'd all driven the trip -- and they all drove hybrids, it seems.

Wow! How about two weeks too late in the smarts department? Why would I say this?

Because, again with fresh memories of the visions of executive excess still dancing in their heads, some House lawmakers insist that any aid come with one particular string attached to go with many others. These watchdogs of the taxpayers' money -- what?!? -- these Members of Congress want the automakers to shed their corporate-aircraft fleets. No owning, no leasing. I'm surprised these custodians of our cash coffers didn't flail them for failing to car pool.

Sorry, but no sense, Members of Congress. No sense at all, this insistence on losing the private planes.

So how about a little quiz and maybe a salient solution for this issue?

First, would all the Members of Congress who have never benefited from the access and efficiency of a private aircraft -- any private aircraft, ultralight to ultralarge biz liner -- please raise your hands? Wow...that's not many of you...not many at all.

Second, would all if you who support such ill-informed ignorance of the facts tell me why this requirement -- along with the salary cuts, benefits reductions, etc. -- wasn't part of the language attached to the bailouts for Wall Street banks and investment houses? Eh? You're awfully quiet here.

Third, would you entertain a sensible alternative to your no-plane, no-sense proposal? It's a method dear to the heart of the White House, the GOP in general and even a significant number of Democrats: A cost-benefit analysis.

Impose a limit on the fleet; restrict use if you want -- but make the restriction based on the costs versus the benefits of taking the company jet. Too complicated, to obvious you say? How would we know, who would decide and how fast can such analysis be done, you asked?

Man, I'm so glad you asked. There just happens to be a computer-based software tool that performs exactly this function and it's employed by hundreds of companies daily to help them decide when company staff goes commercial Human Mailing Tube and when they go private aircraft. The National Business Aviation Association commissioned its creation to solve this very real question for company finance managers, execs and board members.

It's called "Travel$ense" and it's available through NBAA. And it's nothing short of brilliant in the depth and range of factors used in the equations.

First, the user plugs in the aircraft type, and the program helps with operating costs based on user-supplied figures for fuel, insurance, maintenance reserves, crew costs and wait times. Travel$ense also factors in such variables as hotels and meals if required. And finally, it looks at real-time air fares for proposed trips, rental cars if needed to get from the airline airport to the ultimate destination -- important since the company plane can go places the Airlines don't -- as well as the cost of staff time using the airlines versus the company jet. And if the airline trip can't get the employees home same day, it also will look at real-time room and meals costs -- for one person or dozens.

Then it caculates the real-time, relative costs of (a) going by Commercial Human Mailing Tube and all necessary sundries; and (b) the actual costs of using the company plane, along with any necessary sundries. As most of us know, many times the private plane can accomplish the trip in less time -- say same day, in many cases -- where the airline times lose out.

But when all is said and done, the CFO, CEO and Chairman of the Board can all see which mode makes the most financial sense to the company.

Requiring the use of Travel$ense or some comparable, equally effective way to calculate the cost-benefit numbers for the company plane and the airlines makes huge sense for a company trying to make the most with little.

Allowing the companies to keep what they need for company travel and requiring the calculations to show the gain for using those aircraft would likely bring an end to such madness as allowing multimillionaire execs to ride home for the weekend -- at company expense -- but it would preserve the sensible, cost-beneficial aspects of corporate aircraft for companies with very real financial issues, as well as security and efficiency issues solvable far more inexpensively by using business-aviation aircraft.

And it would also help change the equation in how the public views the whole field of private aviation after hearing repeatedly that the company planes are used only when they make financial sense.

Of course, that requirement could still result in a dent in FBO business when companies found they could no longer find themselves required to attend a meeting in Louisville, Ky. -- curiously the day before the Kentucky Derby -- or in Indianapolis the week of the 500, or in whatever city the Super Bowl lands in -- the day before the Super Bowl.

In other words, CEOs and high-flying execs would no longer be free to be stupid about their business-aircraft use. And that would reduce the so-called excesses of corporate aviation to only those able to pay their own way -- the very rich -- and Members of Congress, who we know aren't always quite that bright.


Blogger Tom said...

You could not have expressed the situation any better! Those stuffed shirts in the Capitol have never had to earn an honest buck in thier lives.
I am a GM retired engineer and needless to say, I have been fully tuned to what has been going on with the auto LOAN situation. If the government can give the financial institutions BAILOUT money without any oversight,how come they demand so much from the US automakers?
The mess the financial institutions got us into is the real problem that is facing the US automakers...not because they have been not making progress with alternative fuel vehicles and lowering costs.
Tom Gilmore

9:18 AM  

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