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NINETY EIGHT REGENCY

GM CEO Whitacre flying on AT&T jets

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GM CEO Whitacre flying on AT&T jets

His contract with ex-employer offers lucrative plane perks

Robert Snell / The Detroit News

General Motors Co. dumped its corporate jets last year while in bankruptcy after being berated by lawmakers in late 2008 for flying top executives to Washington to ask for a bailout.

But Chairman and CEO Edward Whitacre Jr. still flies private, thanks to a little-known perk negotiated with his former employer, AT&T Corp., before he joined GM in 2009.

Whitacre, 68, negotiated a lifelong deal with the telecommunications giant before he retired in 2007 with a $158 million package that allows him to fly, free, on AT&T corporate jets for up to 10 hours a month. That's the equivalent of two round-trip flights between his home in San Antonio and his apartment in Detroit. The perk costs AT&T, where Whitacre was chairman and CEO, about $20,000 a month, according to a filing with the U.S. Securities and Exchange Commission.

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The perk is a potential image problem for AT&T and GM, which was rescued by more than $50 billion in taxpayer money, corporate compensation experts said.

The benefit should be suspended until Whitacre leaves GM, according to management and executive compensation expert David Lewin, a professor at the Anderson School of Management at the University of California, Los Angeles.

"It's more than a perception problem. If I was an AT&T shareholder or executive, I'd put up a stink about this," Lewin said.

Whitacre's pay package at GM is valued at about $9 million, including an annual salary of $1.7 million. The automaker said he does not use AT&T planes for GM business.

Jet used 'at his discretion'

"It's something he uses at his discretion," GM spokesman Chris Reuss said. "If he's using it to commute to and from San Antonio, I don't know. How Ed chooses to get to and from San Antonio is the same as how I get to and from Northville. It's my prerogative how I get to work and how he gets to work."

An AT&T spokeswoman would not say how often or for what purpose Whitacre uses the company's aircraft.

A GM source told The Detroit News that Whitacre has used the jets to shuttle between Texas and Michigan.

AT&T spokeswoman McCall Butler said Whitacre has "a limited number of hours to use AT&T aircraft for personal use within the U.S. He may very occasionally use his personal hours for travel that includes Detroit." She declined further comment.

Lewin said it is difficult to determine how widespread the perk is across corporate America because most companies don't disclose the information. But it would be hard to argue that Whitacre is using AT&T aircraft only for personal use given the consuming duties of a corporate chairman and CEO, he said.

"When you are a CEO," Lewin said, "you can't, or it's difficult, to separate your private life."

Peter Kaufman, a New York investment banker who represented dissident bondholders in GM's bankruptcy, said from a "public relations" perspective, "this would play better if GM was actually making something of itself. Corporate perks are looked at very differently when a company is knocking the cover off the ball than when you're on the public dole."

The government owns a 60.8 percent stake in GM, which gave up seven corporate planes and its leased hangar at Detroit Metropolitan Airport. Eliminating the jets was a condition of receiving federal aid.

Whitacre's use of corporate jets could be perceived as a questionable practice given GM's financial troubles and the government's stake in the automaker, said Samuel Bernstine, a Newcastle, Pa.-based partner with consulting firm Kepner-Tregoe Inc.

Seeking to avoid 'barriers'

"On the other hand, given the role he plays and the decisions that need to be made worldwide, you want this guy to be working 24/7, within reason," Bernstine said. "You want him focused on where he needs to be, when he needs to be there, and you don't want transportation as a barrier."

AT&T also agreed to pay Whitacre up to $26,000 a year, for life, for an automobile.

GM's top execs are allowed to charter flights in North America when a "clear business rationale is stated" and to fly business class on all flights, according to the automaker's luxury expense policy.

During its stint in bankruptcy last year, Chrysler LLC terminated leases for two aircraft. Ford Motor Co. voluntarily scrapped its corporate jet fleet following Congress' criticism in late 2008 when the CEOs of Detroit three automakers flew corporate jets to Washington to appeal for aid.

That year, Ford spent $344,109 on personal use of company and private aircraft for CEO Alan Mulally, according to a regulatory filing. He now flies charter aircraft.

Chrysler CEO Sergio Marchionne gets around bankruptcy rules because he is paid by Chrysler partner Fiat SpA, where he also is CEO and not subject to pay caps and other regulations.

He uses Fiat jets so there is no cost to Chrysler for frequent travel between Auburn Hills and Fiat headquarters in Turin, Italy.

From The Detroit News: http://detnews.com/article/20100308/AUTO01/3080324/1148/auto01/GM-CEO-Whitacre-flying-on-AT&T-jets#ixzz0haqbpssX

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I really disagreed with the "public" on this issue to begin with. Only part of the justification for corporate aircraft is perk. The majority of the other reasons are high level marketing, risk management, and travel scheduling. Really people, this is America where it used to understood that if you want a private aircraft you could work hard and have it. Now so many think that we should legislate no one should have them because the dream for most now seems unattainable.

...perhaps they are right considering the state of todays educational system.

Ed worked hard at AT&T and built a solid and profitable company. He earned every bit of his pay as well as the corporate office named after him.

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Executives' time is incredibly valuable. For them to waste hours in airports with the rest of us cattle is crazy, which is why it's worth it for them to have their own planes. Not to mention that their schedules are unpredictable.

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Executives' time is incredibly valuable. For them to waste hours in airports with the rest of us cattle is crazy, which is why it's worth it for them to have their own planes. Not to mention that their schedules are unpredictable.

+1. Public or private, it's not in the shareholders best interest for execs to waste time in airports.

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BS.

Get with the times.

Video conferencing.

Almost all major airports have executive conference rooms.

In the company I work for, we issue laptops with built in webcams and a webex account. We also have HD video conference rooms in all of our major offices.

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name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="
type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>
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BS.

Get with the times.

Video conferencing.

Almost all major airports have executive conference rooms.

In the company I work for, we issue laptops with built in webcams and a webex account. We also have HD video conference rooms in all of our major offices.

Video conferencing is useful, but there are always scenarios where face to face in person meetings are necessary. I work for a big national bank and use audio conferencing and MS Net Meeting all the time since my team and others I interact with are spread across the country. But there are still times when the managers, etc travel to other locations for meetings.

Plus, you can't go out to dinner/strip clubs/etc on expense accounts w/ your colleagues/clients at a remote site when teleconferencing..

Edited by Cubical-aka-Moltar
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Video conferencing is useful, but there are always scenarios where face to face in person meetings are necessary.

Plus, you can't go out to dinner/strip clubs/etc on expense accounts w/ your colleagues at a remote site when teleconferencing..

We've actually had interviews where the candidate was here in Pittsburgh and the interviewer was in our London office. The whole point of this is to save money... yes that would hit the strippers where the sun... um... does shine.

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Do you really think that these companies, locked in relentless competition, are simply oblivious to video conferencing technology? The fact that they do have private jets and use them shows that they believe the benefits of whatever it is they need to travel for are worth the costs.

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We've actually had interviews where the candidate was here in Pittsburgh and the interviewer was in our London office. The whole point of this is to save money... yes that would hit the strippers where the sun... um... does shine.

My sister is working on a project now in SC where half her team is based out of London and Glasgow. but 3-4 people from the UK fly in for 2 weeks at a time every month... Next month, she is going to have to start commuting periodically between SC, Ohio, Buffalo, Scranton, with occasional trips to Glasgow and the home office in Belfast (and flying home to Phoenix occasionally). All that travel doesn't seem cost effective to me.

I don't think this company and it's UK parent is utilizing videoconferencing as much as it should...

Edited by Cubical-aka-Moltar
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Do you really think that these companies, locked in relentless competition, are simply oblivious to video conferencing technology? The fact that they do have private jets and use them shows that they believe the benefits of whatever it is they need to travel for are worth the costs.

Or they are just a bunch of rich folk who like jetting around the country on a whim at the expense of shareholders and workers beneath them......

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Or they are just a bunch of rich folk who like jetting around the country on a whim at the expense of shareholders and workers beneath them......

Or they are just a bunch of rich folk who like jetting around the country on a whim at the expense of taxpayers and citizens they consider beneath them...... Like Nancy, Hary....etc Have you seen the weekly cost of Nancy's 757 she demanded?

The head of companies needs and should use the jets as needed. The time restraints are real and in some parts of the world the secutity issues are real.

Also many times the press the flesh is a real deal maker or killer.

I don't think the should be using them to just go home every weekend or to a weekend in vacation in Maui. But the needs are there and they do need to be used.

Even at my company we do what we can but often we have to fly to the different facilities to deal with issues first hand.

With Bob retired we could plop Ed in the back seat of his fighter.

If GM shows a profit and regains market no one will care how Ed gets around. Companies are mesured on results.

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I think it's disgusting the abuses of the congressional delegations as well. I notice you only included democrats however.....

I'm a cheap SOB.... I admit it.

Biden took Amtrak to work daily... I really like that about him

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I think it's disgusting the abuses of the congressional delegations as well. I notice you only included democrats however.....

I'm a cheap SOB.... I admit it.

Biden took Amtrak to work daily... I really like that about him

The Dems are just in charge right now and are the present examples. I don't play the party game since they are all pretty much useless so don't get too worked up on taking sides. This is not a matter of left or right.

Sorry I do not buy into Joe's I am just a regular Joe thing. He is far from it. The Amtrak thing is good for votes in the east coast corridor and he knows it.

EIther way the leads of GM need to be and see what is going on in many of the things GM has. I know when my company president comes in things pick up because we know he has first hand knowledge of what we are doing and knows us each by name. With the number of people we employ it make a impression. This kind of hands on approch adds to leader ship. Getting a call from someone you never met or see mean so little. During WWII many Generals like Patton lead the way and many CEO's could learn from this.

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This thread makes me wish for a 'I'm On a Jet' song from The Lonely Island. (I love the 'I'm On A Boat' song and video).

Edited by Cubical-aka-Moltar
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I must have missed that one.

I did see the parody on Toyota set to My Shrona. Neat video with all the crashing Toyota's.

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BS.

Get with the times.

Video conferencing.

Almost all major airports have executive conference rooms.

In the company I work for, we issue laptops with built in webcams and a webex account. We also have HD video conference rooms in all of our major offices.

<object width="425" height="344"><param name="movie" value="

name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="
type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>

Agreed.

Just adds to the greed issue.....

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This thread makes me wish for a 'I'm On a Jet' song from The Lonely Island. (I love the 'I'm On A Boat' song and video).

"Like a Boss" doesn't work?

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