GM fires 49 and dumps flight department

February 17, 2009

General Motors was forced to terminate 49 employees from its now-eliminated corporate air operations department as one of the terms for winning emergency funding from Congress. All seven aircraft in the GM fleet are parked at Detroit Metropolitan Wayne County Airport waiting to be sold.

All of the aircraft are leased; however, they can’t be returned to the financing companies without stiff penalties, although GM spokesmen were not at liberty to disclose the penalties.

“Needless to say, in today’s market, no finance company is interested in taking back leased planes early,” a GM spokesman said. GM has been unable to sell the aircraft, but corporate executives are all flying on commercial flights.

The top executives of GM, Ford, and Chrysler ran afoul of Congress when they used corporate jets to travel to a hearing on their need for emergency funding, and all were required to get rid of their corporate flight departments as a condition to receive the funds.

The heads of eight banks, testifying in early February and not under any congressional edicts on the use of corporate aircraft, chose not to fly to Washington by corporate jet. Although not under any congressional requirements to eliminate corporate jets, the head of one bank did so voluntarily.

Still other companies, such as Canada-based Nortel Networks Corp. now operating under bankruptcy protection laws, have joined in dumping corporate flight departments. Citigroup officials at first defended its sale of two older aircraft and the purchase of a new corporate jet, noting it would result in millions of dollars of penalties to cancel the order, but days later cancelled the sale to avoid criticism from Congress. No public funds were involved in the purchase or the payment of penalties.