Electric Cars or Not, Corporate Jets Must Go for GM
The Bush Administration bailed out GM on Friday, after pushing the prospect of bankruptcy as the most reasonable option. The most compelling language in the bailout agreement: A mandate for electric cars or fuel efficient models? Not at all. The government has focused in on forcing GM to get rid of its corporate jets, which drew little notice until the Big 3 CEOs flew to Washington to be upbraided by lawmakers.
The legislation had little to say about fuel efficiency, electric or hybrid cars, or the feasibility that a loan to GM will do anything to resurrect the struggling company. In regard to emerging technologies, the legislation requires merely that GM “intend” to “commence domestic manufacturing of advanced technology vehicles.”
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As to corporate jets, the legislation was more explicit:
“With respect to any private passenger aircraft or interest in such aircraft that is owned or held by any Loan Party or any subsidiary immediately prior to the Closing Date, such party shall demonstrate to the satisfaction of the President’s Designee that it is taking all reasonable steps to divest itself of such aircraft or interest. Further, no Loan Party shall acquire or lease any such aircraft or interest in such aircraft.”
The moral of the story: You may never be able to purchase a GM electric car (see Chevy Volt for all of the eggs in GM’s basket), but you most certainly will have the opportunity soon, to purchase one of the seven corporate jets previously used by GM.
Image Credit: Gulfstream
Sources: United States Department of the Treasury, The Sydney Morning Herald
There are no batteries in the world that can come close to the energy density of a gallon of algae-diesel.
Electric autos at $40,000 will never sell.
Awesome post.. and dig out of the paperwork!!
This issue is starting to wear on me! It’s a complete distraction from fundamentals of the auto industry’s platform of building combustion engine vehicles that require too many factories, suppliers- and lock them into ‘build, then sell’ business model that rolls dice with depreciating assets on car lots while they hope customers buy.
Are Executive’s time valuable enough to use a corporate jet– I would hope so if they are leading an auto company. I don’t care about the jets– let them fly. But please get rid of the manufacturing and design liabilities of the combustion engine.
Good find!!
Garry G
Editor
The Energy Roadmap.com
They are all global companies and I imagine they have to have meetings, etc. aboard the planes while en route to wherever they’re going. The corporate jet issue is just class envy finding something it can sink it’s teeth into. Even if the jets cost $25M each to maintain each year, 7 jets is only $175M, which is peanuts compared to the UAW legacy costs amounting to tens of billions per year.
Typical government inaction and doublespeak. I know I should not be surprised by this, but I was really hopeful that The Big 3 might actually be forced to become viable companies. All this represents is Bush( I was very pro-Bush for a long time) latching on to one inconsequential fact from the hearings and trying to greenwash this whole bailout. Very disappointing!