In the US the government is discussing the possibility of giving GM, Ford, and Chrysler money to pay off their debts to prevent bankruptcy. The CEO of GM flew into DC in a Gulfstream IV, private jet. The jet is worth around $80 million, and is quite frankly, a little bit of overkill for this short a trip. As a pilot, I see a lot of corporate jets and it kind of pisses me off to see the sheer number of them, especially the upscale inter-continental jets such as the Gulfstreams and Falcons. I'm sure no more than 5% of the trips they make are longer than 2,000 miles. A top of the line King Air turbo-prop can be had for around $6 million. It would burn much less fuel on a short trip, as well. It's very excessive to fly something like a Gulfstream. A Gulfstream IV burns about 450 gallons of jet A fuel per hour. The largest King Air burns less than 100 gallons per hour in cruise. At $5 a gallon, that's a $1,750 / hour difference in fuel burn.
So let's recap:
Gulfstream IV - $80M plus $2,250 an hour in fuel
King Air 350 - $6M plus $500 an hour for fuel
Now, the CEO of GM is sporting around in this thing while his company is billions in debt. Can he really justify that expense? Then again, just about every CEO has an expensive jet these days. I see them all the time at airports. I don't know if this phenomenon will last. I just know, that my company thinks saving a few million on one thing or another is a very big deal. Yet, if you really want the truth, I could easily tell my CEO I could cut find $100M for my company's budget in about 5 minutes. However, I don't think he'd like the answer.
Here are photos of the Gulfstream IV, then the King Air 350, still a very large airplane.
The economy is getting really hard. A lot of companies are announcing lay offs and stocks are plummeting. I wonder if I should dump what I have left in the market. I just have a bunch of Berkshire-Hathaway B shares. I'm pretty confident the market will continue to fall. I hope things don't get much worse, but I think more than likely things will get really bad. I don't believe the U.S. government is acting decisively enough to curtail the problems. Things can get out of hand really quickly. I hope my job stays secure. Though cost accounting is the best position when the economy is down. The people who find the cuts are the last to get cut.
I bet things will get really bad in Japan, even if the U.S. markets start to recover next year. They just rely too much on luxury goods these days. Anyway, I feel bad for my inlaws there. They should be alright, though. My father-in-law is essentially retired and my brother-in-law is a school teacher.
Anyway, they say millionaires are made during tough economic times. Invest wisely and you can end up better off for the bad times.
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