Thursday, November 20, 2008

"Jet"-tisoning priorities

As has now been widely reported and roundly criticized, the chief executives of the Big Three automobile manufacturers flew from Detroit to Washington on separate private jets to beg for an additional $25 billion hand-out (just a month or so ago, Congress approved $25 billion in loans for the companies to help them develop more fuel-efficient cars).

The foolishness of their travel arrangements is evident and probably put the last nail in the coffin of their bail-out hopes. But let's consider for a moment what the trip and the general travel policies say about the executives' and their companies' priorities.

The cost figure tossed around in the articles is $20,000 for each of the round-trip flights; let's go ahead and work with that figure. If the three executives had simply jet-pooled, they could have saved $40,000, enough to pay one of the companies' $15/hour workers for a year, assuming a 33% fringe benefit rate.

First-class same-day tickets on Northwest Airlines with no advance purchase between Detroit and Washington cost less than $1,400. So, the executives could have flown even less expensively, while still enjoying first-class service.

Clearly, this isn't the only trip any of them will make this year. Assuming that each executive makes dozens of trips each year, there are dozens of jobs that could be saved just by simple economizing measures. We're not talking about a cut in the executives extravagent salaries, just some adjustments in travel arrangements.

A CNN article quotes a GM spokesperson as saying, "Making a big to-do about this when issues vital to the jobs of millions of Americans are being discussed in Washington is diverting attention away from a critical debate that will determine the future health of the auto industry and the American economy." But "a big to-do" should be made when a simple bit of coordination yesterday could have saved one of those jobs and when slightly more frugal policies could save dozens more.

It's telling that the trade-off never even occurred to the executives.