Posted on 01/26/2009 5:52:33 AM PST by TigerLikesRooster
Edited on 01/26/2009 6:27:25 AM PST by Admin Moderator. [history]
I agree with you and am against the bailout, but the idea that they were given the money only to make loans to americans doesn’t strike me as part of the deal. They were given the money to stay in business, and run a good business. I don’t think it’s accurate at all to say they were “loaned” the money exclusively to loan to Americans.
Owning a corporate jet makes good business sense, as I said in my post. They plan on selling two of their old jets, which should more than cover the cost for the new Falcon 7X.
I agree with you - I am against the bailout for the financial services industry, as well as the bailout of motor city. But the fact that their executives wisely choose to fly in private jets has nothing to do with the bailouts. Indeed, they have nothing much to do with the solvency of either industry’s companies.
In this day of internet meetings, there is no need for a corporate jet at all. It's not like these guys in a financial institution are going to have to oversee the manufacturing production of some commodity. They deal exclusively with ethereal money transactions. They can do all their business from their home offices and they don't need to travel all over the freaking world in a luxury jet. Especially when they don't have enough of their own money to buy a coach ticket on a Greyhound.
Honestly, if you owned a bank, would you loan any of your money to a company that is as bankrupt as Citigroup?
Pretty sure the naming rights deal was for $400 million, but over 20 years, working out to a much more affordable $ 20 million a year, or only $ 385k a week.
If branding is a big deal (and to Citi, it is), that’s not a bad deal at all. They will make that much in advertising easily when you factor in every time the announcers mention the stadium on a broadcast, or newscasters mention the stadium, or it’s mentioned in passing on ESPN, or on The View, or on Regis Philbin, etc.
Citi buying a corporate jet isn’t “spending just like drunken sailors.” Not necessarily, anyway.
I can't agree. The reason you buy a top of the line jet is to travel in comfort, and often these jets are used to shuttle clients and other people you want to impress.
Buying this jet without fitting it with a top of the line interior doesn't make any sense.
Some business does require face to face meetings. Sometimes you want to fly a big client into town - their time is expensive, and so is yours.
The value of the time of an executive who makes $30 million a year is $ 15,000 an hour. If a flight costs $20,000, it makes sense to go with a private jet if the use of the flight saves the company more than the value of the passengers’ time.
Also, much of business is meeting in person, cultivating personal relationships, getting some bigshot a girl who will rock his world back in the hotel room (or in the private jet, for that matter). At that level it’s a whole new world. It’s not like an electronic meeting can match the power of those kind of “Mile High” experiences.
Some things you don’t learn in business school.
If that couch could talk...
What sort of services do you have in mind? Are you actually conservative, or just socially conservative and economically populist?
You might benefit from an economics class.
So the taxpayers are financing hookers and bribes?
Ok I was pretty much against the idea of a corporate jet for these bailed out companies.
Now I'm against them for any company.
Some things you don’t learn in business school.
These are the kinds of things you learn in prison.
Who said hookers and bribes? Maybe some romantic company and perks.
You did.
How dare they - how dare they?
Because they don't think you'll use your guns for anything other than deer season.
Nope, I didn’t. You are imagining things.
> Citi buying a corporate jet isn’t “spending just like drunken sailors.” Not necessarily, anyway.
You’re right: I do drunken sailors a disservice. At least they usually get something for their money. Citi spending $50 Million on a private jet is “spending like a shameless wastrel”.
For $50M you can buy a hang of a lot of economy plane travel.
And no, no executive is important enough to travel by private jet. And no business is so important that it must be discussed in-flight.
Unless you are the President of the United States, everybody ought to fly via commercial airline.
Like I wrote, if the value of the passenger’s time makes it worthwhile to travel by private jet, then it’s a wise use of resources.
It’s just an economic decision. Run the numbers.
> Like I wrote, if the value of the passenger’s time makes it worthwhile to travel by private jet, then it’s a wise use of resources.
Well, given that Citi has lost a snootful of money — so much that they require bail-out by American taxpayers — millions and millions and millions of dollars, I would valuate their time at something less than minimum wage.
At minimum wage of, say, $10 per hour (I don’t know what it is in the US) they would recover the cost of depreciation on their aeroplane... let’s here... depreciation at 10% per annum... yup!
Recovery at sometime around the Second Coming.
Nope — these clowns ought to fly coach. If it is good enough for PwC Partners it is good enough for money-losing Citibank employees and executives.
What these men and women earn is not a matter of opinion. Whether they deserve their compensation is a matter of opinion, though.
The numbers are not a matter of opinion, though. They are what the are.
If you take 10 execs who make a combined $20 million annually, like I said, the combined value of their time is $10,000 an hour. So long as a private flight saves the company more than the value of their time, a private jet makes sense.
As a general matter, not specific to your thoughts, I never thought I’d see so much naked class envy on FR. Really, a remarkable development.
> As a general matter, not specific to your thoughts, I never thought I’d see so much naked class envy on FR. Really, a remarkable development.
There is some class envy, as you say, and it has been noticeable. I think alot of what you are seeing is different to that. People are perceiving a huge value gap — one that they are paying for, out of their own pockets.
As good free-market capitalists, I think most folk on the FRee Republic have no issues with people making as much as the market will bear. I certainly don’t mind. Providing only they are generating at least that much value.
If they aren’t generating that much value, they are overpaid. Which is OK so long as somebody else is paying: good for a laugh, maybe a mild rebuke.
But if somebody is grossly overpaid AND people are paying for it out of their own pocket (in this case via taxes) what you’re seeing isn’t “class envy”, it’s Righteous Indignation and Holy Rage.
Perfectly understandable. Anyrate, you write:
> If you take 10 execs who make a combined $20 million annually, like I said, the combined value of their time is $10,000 an hour. So long as a private flight saves the company more than the value of their time, a private jet makes sense.
Only to an accountant, who only needs to take dollars-and-cents into consideration when making a decision (which is why, BTW, accountants should never be allowed to run anything: they know the price of everything and the value of nothing).
In this particular case, the numbers may well stack up to make the business case for a private jet. But if you were to ask the PR Director or the Executive Salaries Sub-committee Chairman, you might get two different answers, both of which would say strongly “No Way”. So let’s ask these two hypothetical people:
From the PR Director:
“What message does this send out to our market, to the government, and to our Shareholders? That we can be wanton and careless in our business conduct and practises, and be bailed out by the government, and then splash out on an executive jet mere weeks after receiving a government check in out hot little hands — which our customers and shareholders, naturally, are going to pay for? It’s a terrible message to send, on that will damage our already tattered brand. I’m opposed to the purchase.”
From the Executive Salaries Subcommittee Chair:
“I’m opposed because it sends an unhealthy message to our Executive team. This establishes an unearned perquisite and rewards poor performance. True, a private jet may make sense financially, but it achieves the exact opposite of what our bonus and compensation strategies set out to accomplish: that is, we reward good performance and penalize poor performance. I say they fly coach class.”
I think these two viewpoints trump any financial consideration that would indicate it to be wise to purchase/lease a private jet.
If I were Chairman, my vote would be “No”, and I would expect my Board to follow me.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.