Ford hasn't hopped on the government loan list yet, and there's actually an economy to the use of private jets. Sure, Ford is still working on other cost-cutting measures as well, including eliminating merit-based salary bumps for U.S. employees, lowering bonuses for 2008 and 2009, and offering zero cash payment to board members in 2009.
“Ford is acutely aware that current economic conditions have had a significant adverse impact on our shareholders, customers, dealers, employees and other stakeholders,” the company said in the preliminary proxy. “We do not view these actions as merely symbolic, but as a necessary step in the restructuring of our business in which all our stakeholders have been asked to participate.”
But there's a reason Ford is still chartering private jets during these austerity measures: it's cost-effective. Last year Alan Mulally took a 37% hit in his total compensation, but still brought in $13.57 million. That's equivalent to $52,192 for each of the 260 working days in the year (neglecting overtime, of course), or about $6,524 per hour, based on an eight-hour work day.
Regardless of the fact that Mulally doubtless works far in excess of those figures, it puts a more comprehensible value to his time. And considering Ford's relatively enviable position among the Detroit 3, it's hard to say he hasn't earned it. In the end, the $344,109 spent on Mulally's use of company and private aircraft in 2008 is equivalent to about 52.75 hours of his working time - about a work week. Given the average 2-hour cumulative delay for arrival, security screening and baggage claim at most commercial airports, Ford earns back the money spent in just 14 trips - probably an average month for a busy CEO.
The decision to use charter aircraft, therefore, is at least potentially one that saves the company money in the long run, and knee-jerk reactions to the highfalutin method of travel should be seen as such. Ford has, however, decided to put its private fleet of planes up for sale, a move which would not only recuperate a portion of the purchase price, but remove the fixed overhead of their maintenance and storage.
Even considering Ford's refusal to seek government loans, the company lost $14.67 billion in 2008. That tempers the expenditure of company funds in such a manner, but Ford's behavior smacks more of responsibility and reality than GM and Chrysler's highly symbolic measures.
In a year when even Toyota is losing funds at an alarming rate, perhaps it's not the private jets and multi-million dollar salaries that are the problem. Maybe it really is a faltering global economy, a gutted credit market and unheard-of drops in America's demand for new cars.