Ford CEO Mullaly said he is going to drive a hybrid to Washington this time.

Maybe they could all car pool too.

 

I wonder if he will drive a 2010 Ford Fusion Hybrid or 2009 Ford Escape Hybrid. Interesting showmanship but inconsequential to the financial health of Ford. It will cost about the same for Mulally to drive to DC as to fly on a corporate jet.

Mulally makes $1,009 per hour in base salary. It is 524 miles from Detroit to DC and takes ~ 11 hours if he gets meal breaks. (Longer if he gets the same breaks UAW workers get) Current IRS mileage reimbursement is $0.58 per mile.

Roundtrip by car:
Time: 22 x $1,009 = $22,198
Mileage: 1048 x $0.58 = $608
Total: $22,806

Corporate Jet:
Time 6 x $1,009 = $6,054
Flight Cost - $20,000
Total: $26,054

The jet seats 8-12 and costs $20,000 if it has 1 passenger or 12. The Escape seats 5. I'm curious how many cars the Hybrid caravan will have in it.

The companies I've worked for don't let employees drive outside a ~ 6 hour radius precisely for these reasons. By the time you factor in a wasted day each way and mileage reimbursements, it costs the company less to fly. Delphi had the most formalized system. They have a computer application which your put your travel information into and it tells you if you are approved to fly or drive.

 

Yet the GM board is so far out of it they haven't even followed suit ... much less initiated the same, "let's take a hybrid to beg for money" theme. If they do, it'll be that 19mpg land barge, rather than the Volt.

 

Right. Because there is no alternative to flying in the corporate jet or driving from Detroit.

Oh wait, what about an airline? LIKE WE ALL DO!! That's what I would do if I had to go to DC. These out of whack responses do not raise confidence.

Additionally, he is not a salaried employee. It is not valid to calculate his salary on a per hour basis.

And I thought FOX news logic was becoming outdated.

 

DETROIT – Ford Motor Co. will tell Congress that it plans to return to a pretax profit or break even in 2011 when its CEO appears before two legislative committees this week.

Also, CEO Alan Mulally said he'll work for $1 per year if the automaker has to take any government loan money.

The plans Ford submitted to Congress on Tuesday also say the company will cancel all management employees' 2009 bonuses and will not pay any merit increases for its North American salaried employees next year.

The company also said it will sell its five corporate aircraft.
...

Mulally said Ford will seek $9 billion in government loans but may not need them. The Dearborn-based company has said it has enough cash to make it through next year without assistance.

As part of the plan submitted to Congress, Ford said it does not anticipate a liquidity crisis in 2009, "barring a bankruptcy by one of its domestic competitors or a more severe economic downturn that would further cripple automotive sales." The loan would provide a safeguard against worsening conditions, the company said.

The company said it will accelerate plans to roll out plug-in electric vehicles as part of its plan. The vehicles will come out starting in 2010 and include the Transit Connect small van and a car the size of the Ford Focus compact.

Ford also said it will accelerate plans for hybrid gas-electric vehicles.

Ford says CEO will work for $1 to get gov't loans - Yahoo! News

 

Yes, they could take a commercial airline and pay on a per seat basis. Whether this would cost less than a private plane depends on how may people travel to DC. It also costs time which for senior level executives is quite expensive. It is also likely against company policy. Many fortune 500 companies have policies against their senior executives flying commercial airlines due to security reasons. This is driven by insurance costs.

Mullaly is a salaried employee. He is paid a yearly salary regardless of how many hours he works. This doesn't mean that his time is free. Everything we do has opportunity cost. Right now Mullaly's time should devoted to saving his company not driving 10 hours to DC or standing in the security line at the airport.

BTW, since leaving school with a engineering degree I have been a salaried employee. That doesn't mean that my companies haven't calculated pay based on a hourly rate. All of my checks have hours x hourly wage = gross pay. The difference is that my week always says 40 hours regardless of the true hours worked. (Usually 45 to 50 but as many as 80 when hot projects with deadlines need to be completed)

If my companies prefer me to fly in order to save time (and therefore money) at my small salary why wouldn't they do the same for a CEO that makes many times more?

 

If you were the CEO of one of the largest corporations in the world, would you think it would be prudent to spend 4-5 hours every time you traveled in an airport waiting for your flight? These guys sometimes fly everyday in week.

I think driving to Washington is just as silly, but none of this makes sense anyways. Three of the largest corporations in the world are in big trouble and the last hearings were about flying on private jets. Think about this, the congress is going to look at these plans from detroit and they are qualified to make a decision yes or no? I would guess most of them don't know how to balance their own checkbook or balance their office budgets, let alone the federal budget. It is all pretty surreal to me.

This is the reason Detroit is in trouble as is manufacturing in America:

http://www.nytimes.com/2008/11/19/business/economy/19ports.html?ref=business

 

Yes, but if the company goes under, they won't need to fly anywhere anyway.

 

In the end, this bickering about whether taking the corporate jet is more cost efficient is splitting hairs. Just like American Idol contestants, Ford has now shown that they have listened to the 'judges' criticisms and done something about it. They are also mouthing the right words to the American Public about getting plug-ins on the road, the latest rage. As such, the court of public opinion is going to come down a lot less hard on them than on unrepentant GM.

 

Blame U.S. government for auto industry troubles | Freep.com | Detroit Free Press

For many years now, the overarching regulatory structure in America has forced some of our brightest engineers to devote most of their energy not to building better cars, but to devising ever more clever ways to restructure production systems to deliver more cash to shareholders. Hence the waves of outsourcing, consolidation and offshoring that have entirely remade the structure of the industry.

Cash alone won't save Detroit. Nor will busting the last remnants of those unions, nor cutting executive pay. Nor, for that matter, will a national "industrial policy." On the contrary, what we need to do is enable engineers to develop private industrial policies that empower them to compete more effectively with teams of engineers at foreign-run companies.

You know who'll help us do this? I recently spent two months in Japan talking to top auto executives and government officials, all of whom are horrified by America's mismanagement of this and other vitally important industrial systems. If Americans decide to fix Detroit, one place we should turn for advice on how to run industrial corporations is Tokyo.

The single most important lesson the Japanese will pass on is that we must reduce the power of short-term oriented capital over our great industrial corporations. And, indeed, we now know what happens when a society runs its industrial systems not to manufacture products but to manufacture cash.

You end up with neither.

 

Well if he drives a Ford Explorer Hybrid, he's still using more gas than a regular sedan... until he rents a Prius

 

This time, GM Chief Rick Wagoner will drive a company car to Washington instead of flying by corporate jet as he seeks a government bailout, a spokesman says.
Wagoner will drive in a Chevrolet Malibu hybrid sedan when he makes the 520-mile trek from Detroit to Capitol Hill

 

Pop goes the market: Detroit's auto bubble woes - Nov. 30, 2008

From 1999 through 2006, U.S. auto sales averaged 16.9 million vehicles a year. Before that period, there was only one year when annual sales even hit 16 million.

And these strong years came at a time when the number of licensed drivers was posting a modest 1.1% annual gain, suggesting that the sales increases were way ahead of fundamentals. In other words, people bought new cars or trucks because they could, not because they necessarily needed to.

"We had above-trend years, some of which was caused by an incredible growth in household net wealth that later we found wasn't real," said George Pipas, director of sales analysis and reporting for Ford Motor.
Pipas added that sales were "artificially high" in other years "due to a higher and higher level of incentive spending.".

"Now when we look back, we see elements of a bubble," he said. "Does that present a problem today? Of course."

 

Most consumer goods were benefitting from the bubble, now we know the wealth was not real.

 

So now that the bubble has burst, GM's stock is trading under $5 while Toyota is above $60. Pretty stark difference.

 

On Tuesday, Dec. 2, Mulally was driving in a Ford Escape Hybrid, along with three other Ford executives, for two more days of Washington hearings, which start Thursday. In a phone conversation with BusinessWeek auto writer David Kiley, Mulally took a break from his turkey-salad sandwich to discuss the challenge he and Ford face.

So, you aren't driving right now?
We are rotating driving, but they tell me I shouldn't talk to you while driving, so, no.

You are a wealthy, successful guy. Are you eating bad road food and coffee from rest areas like Breezewood, Pa.?
I didn't know about Breezewood before they told me about it. They tell me we have to stop there and get our pictures taken. We stopped at a dynamite service plaza and we bought a little boxed lunch.

Ford's Mulally Hits the Road - BusinessWeek