Just Plane Despicable (Bailed Out Citi to buy $50m private jet)

[Liberal Elitist]

Source: New York Post

Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet - only this time, it's the taxpayers who are getting screwed.

Even though the bank's stock is as cheap as a gallon of gas and it's burning through a $45 billion taxpayer-funded rescue, the airhead execs pushed through the purchase of a new Dassault Falcon 7X, according to a source familiar with the deal.

The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center, according to Dassault's sales literature. It can cruise 5,950 miles before refueling and has a top speed of 559 mph.

Citigroup decided to get its new wings two years ago, when the financial-services giant was flush with cash, but it still intends to take possession of the jet this year despite its current woes, the source said.

Read more: http://www.nypost.com/seven/01262009/news/nationalnews/just_plane_despicable_152033.htm

---

These guys just don't get it, do they?

Couple of days ago Pres Obama warned about bailed out firms wasting money on fancy bathrooms & the like had to stop. Would love to be a fly on the wall when he lays into the guys from Citi!

[whistle]

1. Entitlements for the wealthy

[TahitiNut]

2. Well ... how many (French) people are employed making those jets?

I know. I know. I'm just looking for "silver linings." :shrug:

It's difficult to tell the rich to "spend to stimulate the economy" and then condemn folks for doing it. Then again, buying a French-made jet sorta fucks them, don't it??? (Will they serve "Freedom Fries" on that jet???)

:puke:

[terisan]

3. Administration just sent Biden out to scream that Banks need billions more.

The choice of Biden as VP meant the big banks are in charge of the administration.

Folks, just say no to more billions for big banks.

[acmavm]

26. Exactly. Any old prostitute on the street has more integrity than

Biden does. He whores for rich people and calls himself a respectable man. He's always disgusted me since the Anita Hill hearings. But the way that SOB has helped the banks and the credit card companies screw the American people is an absolute SHAME!

[boobooday]

4. Let's see, perhaps we should all deduct that from our credit card bills

Or charge them interest for it at their credit card rates.

[LisaM]

5. At least the auto execs only flew in one

They didn't actually go out and buy a new one! But SNL, I'm sure, will save its skewering for the auto companies.

[bdab1973]

6. I know I'll get flamed for this...

But having flown in the corporate jet world (as a pilot of Learjet 35s) it is often cheaper for corporations to send a dozen execs to attend a business meeting on a private jet than pay for airline tickets. Have you priced business class tickets bought at the last minute to Europe or Asia? It's staggering, and with that, you don't get any flexibility on when you travel, and you wind up having to pay extra for other travel costs associated with flying to destinations that may not be as close to your meeting site as smaller airports.

In many cases, flying corporate jets costs the same or in some cases less than flying a bunch of execs on the airlines. Business aircraft are business tools, they are usually NOT used for simple luxury flights to island destinations. The organizations I've worked with have dispatch personnel that use software that maximizes the efficiency of the airplane's use. They are generally not frivolous investments. And if you expect large international banking companies like Citi to conduct business without traveling, then you are naive.

Bottom line, not owning a jet in many cases is actually more expensive than operating one. That's why so many businesses have jets, because they make travel sense, not because it's cool. You would really be surprised to know how many businesses operate aircraft...thousands of corporations big and small operate their own aircraft from little single-engine Cessnas all the way to the big Gulfstreams. The big jets aren't bought for excess...they are bought for their range, to conduct international business.

[ixion]

8. there's this great invention called the telephone

that is way cheaper than a 50m corporate jet. :)

[bdab1973]

14. You apparently haven't had to do any corporate travel...

They don't just sit around and talk all day...

Many businesses use their aircraft for mid-level execs to travel for a variety of reasons, not just sit in a board room and chit chat. Site visits, presentations, surveys, audits, you name it. Many of those things you HAVE to be there in person. And in many parts of the world, personal interfacing means the world to many cultures. If you're the only corporation that throws it's name in the hat with a phone call, and everyone else came by to shake hands and actually pitch their sale in person, you lose, and you won't be in business long.

Please tell me that you're not so naive to believe that NO ONE in the Citigroup corporation has any travel needs?

[ixion]

okay... well, actually I've done a fair amount of business-related travel over the years

and certainly there are a few reasons for an exec to have to be on-site, but the vast majority of travel is for just what you mentioned above: sitting around a table and talking.

I would venture that 90% or more of citibank's travel could be eliminated and replaced by online technologies.

[bdab1973]

25. They have such technologies

Yet still corporations big and small invest in business aircraft. There's a reason why so many companies use aircraft to travel, because it makes them competitive. I know about the stuff you talk about because I've seen that stuff used...virtual meetings, etc. And many companies take advantage of that technology when it's the best option. But in many cases, nothing beats being there in person, to do whatever business you need to take care of. If it was really that wasteful, then why are there literally thousands of companies that employ aircraft, large and small, to do business with?

I rarely ever had a jet with just one or two people on board, and it was always scheduled for business use, not for personal use.

[ixion]

40. sure... it's always nice to be face to face...

don't get me wrong... if your company is flush with cash, fly all you want. But when you've just come to the taxpayers, hat-in-hand asking for a bailout, lest you perish, it seems to me that you could fly coach, rather than a private jet, and limit those trips to what is absolutely necessary.

Travel bans are not unheard of in the corporate world, many companies who have not received taxpayer money are tightening their belts. It seems to me that the banks should be doing that as well.

If I were a potential client, and I knew the company that I was dealing with was insolvent, and the exec showed up in a private jet, I would be wary of allowing this person to do much of anything with my money.

[Obamanaut]

47. "you won't be in business long" without my tax dollars, or yours, or

those of your grandchildren either - perhaps only a couple of more months.

If they did not have the jet, and the cost of operating the jet is ignored, and one buys business class tickets at an average of $1,000, then the purchase price of this new toy would buy approximately 50,000 tickets.

There is no way these corporate beggers can justify this purchase.

[enuegii]

55. Yeah, I guess it would be pretty hard to blow someone over the phone. eom

[TahitiNut]

9. (self delete)

DU software glitch

[TahitiNut]

10. That's why G-d invented air charter services.

:shrug: Maybe those air charter services would use American-made jets?

[bdab1973]

15. It depends on the amount of travel you do...

Using air charter becomes disproportionately expensive if you travel alot. It would be cheaper to travel by airline in that sense. That's why MOST charter customers tend to be celebs and others that use business aircraft as a luxury form of transportation. It does not make sense to pay someone else money for profit to fly the same airplane that you could buy and operate on your own for less if you travel more than 50 hours a year or so. Most business jets are utilized around 800 hours a year.

[TahitiNut]

29. Your example cited 10-12 executives flying together.

For such travel, air charter makes sense ... when the travel itself cannot be avoided by teleconferencing or other means. For individual executive travel, it makes sense that they travel like ANY individual employee. After a career of forty years, the majority in the "belly of the (corporate) beast," I traveled EXTENSIVELY, both domestic and international. I occasionally rode a corporate shuttle between corporate headquarters (located for executive 'convenience' in housing and cronyism) and the corporation's major operational site. So, I'm somewhat familiar with such travel AND familiar with the 'management decisions' regarding corporate sites that adds to the 'necessity' of such travel.

When I traveled on corporate business back in the 70s, most corporations had policies that called for coach travel on trips of less than 4 hours (total, one-way) and first class on trips of greater than 4 hours. Indeed, I traveled to and from France on corporate business in the late 70s ... first class Air France. (Yeah ... it was posh.)

In the last 30-40 years, coach has gotten increasingly crowded, due to higher occupancy, due to higher capacity, due to shorter seat pitch, and due to narrower seats. It's abominable. At the same time, PEOPLE have gotten larger! (No... NOT just obesity.)

It's high time that our transportation systems were required to afford minimal human space akin to what we buy in our automobiles, and what's offered in trains and even buses. Part of the 'motivation' for such egalitarian standards in transportation (which is HEAVILY subsidized by the working taxpayers) can be attained by abolishing the tax-deductibility of such obscene perquisites as posh corporate jets ... PARTICULARLY when that corporation gets a taxpayer bailout!

[Swede Atlanta]

11. They don't need to fly First or Business...they need to fly Economy

I don't care what the company travel policy states, if the company is on the public dole in the form of bail-outs, loan guarantees, etc. then they need to be flying economy or economy plus.

[TahitiNut]

13. Heaven forbid! They'd have to make coach comfortable enough for adults, then.

:grr:

[Patchuli]

19. Maybe those bigshots ought to learn

to 'downsize' a bit. Heaven knows my spouse and I cram our legs and fold ourselves up to fly coach. I'm so sick of these over-privileged asshats using MY tax dollars for this crap while they sucking me dry on a mortgage.

[TahitiNut]

37. It's the "luxury box" mentality.

Taxpayers subsidize sports stadiums where the bigshots get to attend with valet parking and luxury boxes ... for free. At the same time, the poor working schmuck can't afford parking, overpriced hot dogs, and expensive nosebleed seats to watch a game in the stadium he's subsidzing with his taxes. It's abominable.

[bdab1973]

16. Economy won't work in many cases...

Mostly because economy tickets are not refundable or changeable. There's no flexibility in most economy tickets. The "economy" tickets that are fully refundable aren't any cheaper than business class tickets. Most business class tickets don't necessarily buy you a seat in first class...it simply means you can change the itinerary or cancel when you want to. I recently priced how much it would be to fly my wife overseas and the non-refundable price was almost $2,000. Imagine flying twelve people, and then the customer moves the presentation date...you're screwed and lost $24K.

[specimenfred1984]

12. Weeeee, a lesson in international business

Now, try to remember the original post which stated that tax-payers are paying for the jet. Now, using your vast big brain knowledge of everything, explain why tax-payers should pay for corporate jets.

[bdab1973]

17. I suppose you want this tax-payer supported business

to go out of business? Seriously, having been a corporate pilot, I understand your point of view because so many of my friends and family thought my job was flying around ritzy celebs and their poodles. It was anything but that...the airplane was often packed with people, and as soon as we took off, out came the laptops and other stuff and they often worked on the flight. I'd argue that a Learjet 35 with 7 people isn't any more comfortable than sitting in coach...I've done it many times and I really couldn't tell you it's any more comfortable.

[AllentownJake]

18. I'd argue they sell the new jet for public relations sake

even for a loss and keep the cheaper ones they already have.

I've flown corporate so I understand your argument however this was a PR boo boo in the worst degree.

[bdab1973]

28. If they ordered it two years ago

It was probably already paid for. Most business jet manufacturers require a substantial deposit before you can even get your name on the list. Making jets isn't like making cars. When you manufacture a product as complex and expensive as a jet and do so in units of hundreds versus tens of thousands (like cars), you want to ensure each unit that rolls off the assembly line is spoken for. More than likely, Citi probably already paid a substantial amount for the jet. Selling it wouldn't have made any sense. And I can bet that the other aircraft that Citi had aren't necessarily cheaper, just older (and thus more expensive to maintain).

[AllentownJake]

30. Sell the Jet

Trust me selling the stupid thing will go alot further in the long run for the company than taking delivery of it. The damage this is going to do and the showboating in congress over this is going to cost them more than the price of the stupid plane. Is it necessarily logical...no but that is the world we live in.

By selling it they say hey we are concerned about the taxpayer...keeping it says hey our executives fly in luxuary why we lay you off and send debt collectors after you. Most Americans never step foot in a corporate jet and its important to remember that.

Its PR 101

[Obamanaut]

53. If they had not gotten our money, and had gone belly up, could

the jet have been sold as part of the bankruptcy evolution? I know nothing about bankruptcy, so this may be a dumb question.

[brentspeak]

59. The heads of Citi are billionaires

Why should taxpayers pay the difference for their personal jet when they can easily reach into their own pockets for that amount?

[jakefrep]

22. How dare you interrupt a good class-warfare rant with facts and stuff!

Thanks for posting.

[AllentownJake]

32. Arrogance and stupidity

anyone in PR would have told them...not a good idea to take delivery of this right now.

[jakefrep]

33. What's arrogant or stupid about running a business efficiently?

If a private plane is cheaper than a whole bunch of airline tickets, why is this a problem?

[AllentownJake]

35. They already have a fleet of jets

They saw what happened to the auto executives for flying on one in the press...what do you think is going to happen if you take possession of a 50,000,000 jet that was meant to be set aside for executives during a time when you are recieving government money and people who are indebted to you who recieved no government money are going through hell to pay you or avoid bankruptcy.

[acmavm]

46. If they ran a business EFFICIENTLY we wouldn't be giving their crooked

asses billions of dollars.

Do you know how flat out ignorant your statement is?

[jakefrep]

49. It's not nearly as ignorant as the class warfare garbage you're spouting

You not only have your head up your ass - you seem to enjoy the view.

[acmavm]

50. Fool. Like I said, they are running NOTHING efficiently. And you just can't

stand to have your nose rubbed in that fact, can you?

[jakefrep]

63. (self-delete)

[brentspeak]

57. "Class warfare"

You seem to be on the wrong site, Rush.

[acmavm]

27. You're not gonna get flamed. You're gonna get told you're full

of it.

And I've ridden in corporate jets myself. Not a luxury that most Americans will EVER experience.

Plus, these guys don't need to go anywhere. They're worthless.

[jakefrep]

34. The people that are complaining are the ones who are "full of it"

[acmavm]

44. I would say that since there's a boatload of us whiny people and then

there's you, all by you lonesome.

I rather think your the one who needs the enema.

[bdab1973]

36. While we're at it...

Since we're chucking spears at these guys for using "taxpayer dollars", how about this to digest...

The US government has a fleet of business aircraft operated as "operational support airlift", which is primarily moving brass and government officials around. Among the fleet that was bought and operated with taxpayer dollars:

C-9B (Douglas DC-9):~20
C-12 Huron (Raytheon King Air 200/300 turboprops): Over 100
C-20 (Gulfstream III/IV business jets): 18
C-21 Learjet (Learjet 35 business jets): 75
C-22 (Boeing 727): 3
C-32 (Boeing 757 airliner outfitted for VIP transport): 6
C-35 (Cessna Encore business jet): ~20
C-37 (Gulfstream V business jet): 15
C-38 Astra (IAI Astra business jet): 2
C-40 Clipper (Boeing 737 business jet): 16

All of those aircraft are used almost exclusively to fly government travelers (mostly Colonel and above and congressional/DoD civilian staff) to official business meetings. I know because I got my Learjet type rating flying C-21s for the USAF. We flew a couple missions actually supporting operational requirements, but most flights were passenger flights ferrying generals, admirals, congressional staffers and DoD/DoS/DoWhatever people all around the US and even internationally.

So I find it hard to believe that everyone is bemoaning the purchase of one aircraft (which was already paid for) by Citigroup for use in their corporate fleet, most likely being used for legitimate business reasons. I'm not here defending the greed of CEOs, but I am defending the perception that business aviation is mostly a bunch of fat cats flying around with their poodles on their way to their own private islands in the Pacific, when the vast majority of the time, these aircraft are tools that are pressed into work, and the people flying them do so to further their company's business, not to cater to a rich clientele.

Everyone is so ready to get into class warfare mode that they fail to realize that businesses purchase millions of dollars worth of equipment each year to operate, and a jet is simply one more piece of that equipment. Unfortunately, business aviation (and general aviation in particular) has the image of ritzy people flying around in the stratosphere. Not long ago I had to defend the notion that not everyone who owns an airplane is rich (I'm contemplating buying one...not a biz jet, but a 1960s Mooney M20C).

I suppose the point of my post is that most people see the biz jet as a symbol of something, and the reality behind it is very different.

[acmavm]

45. You call it class warfare (which already puts you in the WTF column).

I call it stealing from the taxpayers. If CITIBANK were paying for the fucking thing they could buy any damn thing they want.

THE TAXPAYERS ARE FOOTING THE BILL. Did you finally get that part?

[jakefrep]

48. Flying their employees around on commercial aircraft...

..would be a bigger waste of taxpayer money.

[acmavm]

51. Then don't fucking fly 'em at all. Mega big buck aircraft hasn't made them

good at anything that I can see. The only thing they're good at is lying, creating a financial crisis over bad loans that they bet on and sold the bets, and crashed the economies of several countries. And that's already with a number of jets already.

They don't need to go anywhere but to jail.

[Nihil]

66. +1

Damn good summary.

All this bullshit about "efficient use of money" and "cheaper than
going on public flights" is missing the point that most of their
flights are totally unnecessary - regardless of the price or condition
of the pair of wings being used. It is just a big ego-stroking session
both on the part of the bankers flying and on the part of the people
whom they are visiting.

:mad:

[DemoTex]

58. The C-37 (G-V) and C-40 (B-737BJ) were also used Bu$hco's Extraordinary Rendition pogrom.

I use the past tense (were) because I hope it is over. I use pogrom instead of program because the Russian meaning of pogrom is “to wreak havoc, to demolish violently.”

[Obamanaut]

52. So with $50 million one can buy how many business class tickets?

I haven't flown anywhere in years, so I don't know the cost of tickets, but if an average is $2,000 then it is 25,000 tickets for OUR $50 million. And we don't have to pay for unscheduled maintenance, periodic maintenance, replacement parts, fuel, aircrew, landing fees, filing fees, etc.

IF my ticket price estimate is off a few hundred dollars, then maybe they only get 18 or 19 thousand tickets - that's still a lot of executive junkets with the communication technology today - gladhanding notwithstanding.

[Obamanaut]

61. 19,113 tickets for $50 million. Chicago/OHare - Brussels at $2,616

on the Aer Lingus site, business class - I checked today at approx 7:45 pm eastern time. If 12 execs go together each time that is 1,592 trips. No landing fee, no scheduled maintenance, no unscheduled maintenance, no fuel, no aircrew salary, no flight plan filing fee.

And don't forget - it's our freakin' $50 million, NOT THEIRS.

[PaulaFarrell]

65. I'd have to see the figures on that

including depreciation, maintenance, cost of keeping it somewhere, staff costs, landing taxes and all the little bits that add up to the total cost of owning an aircraft. and then weigh that against how many flights were actually flown with how many passsengers, only including those flights that were for business not personal reasons, and excluding all the trips and people who went along as a jolly and not because they actually needed to go anywhere. then it's minutely possible it might be financially reasonable.

[CatholicEdHead]

7. I saw part of 'Boiler Room' and that movie showed the attidude of bankers

Not only the fictional small main one, but they had a couple from the big names like JP Morgan, talk about priorities out of whack.

[Somawas]

20. What a bunch of

corpsefucking douchehammers.

[Liberal Elitist]

21. Is it time to nationalise the banks & kick out the useless management?

Extreme, I know, but a lot of folk in the financial press are suggesting that a short period of nationalisation is the only way to sort out US and UK banks - it worked in Sweden in their 1990s banking crisis

http://opinionator.blogs.nytimes.com/2009/01/21/should-obama-seize-citigroup/

and my favorite http://blogs.ft.com/maverecon/2009/01/can-the-uk-government-stop-the-uk-banking-system-going-down-the-snyrting-without-risking-a-sovereign-debt-crisis/
(snyrting is icelantic for toilet, which is where UK banks are heading...)

[NOW tense]

23. I agree

It will allow money to get past the greedy middle man. As I see it PBO and the Dems one a mandate for Socialism and I think that is what the Repubs need to hear.

[bdab1973]

38. So you think that government management would be better...

Given the fact that the US is way in debt, but still operates a fleet of a couple hundred business aircraft, many that far exceed the cost of a Falcon 7X.

[Obamanaut]

54. Yes. Given the fact that the US is even further in debt because of

corporate greed and extreme mismanagement.

[BootinUp]

24. Do they really wanna do that after it gets the media rounds?

We'll see. Dumb, Dumb, Dumb.

[AllentownJake]

31. Wall Street arrogance and stupidity

I hope they realize alot of Americans are having trouble paying their credit card bills and no matter what logic you use...this looks really bad to them.

[JerseygirlCT]

39. "These guys just don't get it, do they?" Exactly

what I was thinking!

[Blue_Tires]

41. i hope congress remembers this when citi comes back

hat in hand for another $45 billion

[CitizenPatriot]

42. I've flown in private jets for work

and let me just say to whomever said they were no more comfy than regular airlines...

Ha ha ha....

If only I could fly like that all of the time:-)

luxury seat, waited on the entire time, champagne poured before I sit down, no trouble trying to store bags away....clean bathroom...

Air. yes, there was plenty of air as well.

I'd take it any day over regular flights.

And no, I don't want to pay for this. I don't care if it makes sense. I don't want to pay for this shit.

I just lost all my money as shareholder of some of these companies, now they're taking my tax money and screwing me AGAIN and then I get my tax bill and it 's a big FU to the middle class...SO NO, I don't want them buying a jet, they should have thought about these problems when they were driving these companies into the ground.

URGH!!!!! I'm sorry it it inconveniences them, but sometimes they have to pretend for us little people that they aren't hobnobbing with our money as we eat mac and cheese again. Maybe it's all a game, but they should still play. People are ENRAGED.

[acmavm]

43. I e-mailed the White House website and told them that I have a 19XX

Toyota Celica GT that on its last legs and it would make more sense for them to bail me out than it does the theives that created this mess in the first place.

Wonder how long before I get my check?

[Obamanaut]

56. You didn't! I emailed Sen Nelson (Fl) because the top story on

his home page is "Senators take aim at Wall Street excess" and asked is there anyone there who knows what is going on or even cares.

Note: The "You didn't!" was supposed to sound like "Snap!" or "Awesome!" Hope that's the way you read it.

[acmavm]

60. I took it like you meant it. Now I wonder, when I used to e-mail the bush**

White House, I always got at least a 'we received your e-mail blah blah blah'. I haven't gotten one for this e-mail. I wonder if the Obama bunch has auto response set up.

Hey, they'd be better off giving me the money. I work, my work is of benefit to the company, brings in revenue (more than I can say for the Wall Street crowd). And I pay taxes and have no off-shore accounts. I'm a much better gamble.

[not fooled]

62. 'Puke World View

As embraced by Citigroup:



Kleptocracy, peopled by Serfs & Overlords

[Abq_Sarah]

64. There should have been

Strings attached to the bail out funds. They most certainly should have mandated that Citibank NOT jack up everyone's interest rates to make up for their poor business practices.

Personally, I want to know who citibank has been lobbying in Congress and if that lobbying corresponds to campaign donations.

[Romulox]

67. When are Reid and Pelosi publically scolded Mullaly and Wagoner for use of a private jet?

Funny how they haven't got a thing to say about this. Hmmmm,.... :shrug:

[BreweryYardRat]

68. There was this line in the full article. Sparked a few questions for me.

"It's not uncommon for large companies to pay a deposit on a new plane then cancel the order before delivery, according to a source in the corporate aviation business."

How much of a deposit? Hell, someone here could call Dassault and see what they require for a deposit. Did Citibank pay down more of the total 50 mil cost back when they were loaded? If so, how much?

Would President Obama be legally able to mandate that Citibank pay the government the cost differential (amount of money already paid to Dassault, compared to total cost of the plane) from the two smaller $27 million planes they're selling? If so, I'd say let them go ahead, but slap them with sanctions (preferably on the execs' own personal funds) for trying to sell the small planes quietly. If not...can we force them to cancel the order? (From the story, it doesn't sound like they've actually gone ahead and paid Dassault the remaining amount owed.)

Also, I'm surprised to see this piece in the Post. Isn't that paper owned by Rupert Murdoch?

[Blue_Tires]

69. UPDATE: Citi decides against taking delivery of new corporate jet

Citi decides against taking delivery of new corporate jet

WASHINGTON -- Under pressure from the Obama Administration and Congress, Citigroup abruptly reversed course and agreed not to take delivery of a new $50 million French-made corporate jet.

The bank, which has received $45 billion in government loans, came under criticism, despite the company's explanation Monday it would be selling two of its four corporate aircraft to pay for the new aircraft ordered in 2005.

"We have no intent to take delivery of any new aircraft," Citi said in a statement Tuesday. On Monday it defended its 2005 order for a Dassault Falcon 7X.

Sen. Carl Levin, D-Detroit, sharply criticized the plans to buy the plane Monday, calling it "arrogance."

"The notion of Citigroup spending $50 million on a new corporate jet, even as it is depending on billions of taxpayer dollars to survive, does not fly," Levin said. "To permit Citigroup to purchase a plush plane -- foreign-built no less -- while domestic auto companies are being required to sell off their jets is a ridiculous double standard."

On Tuesday, Levin reiterated his opposition. "It was just unseemly to spend millions of dollars on a luxury jet while getting tens of billions of dollars from the taxpayers," he said...

http://www.detnews.com/apps/pbcs.dll/article?AID=/20090127/AUTO01/901270444/1148

[ecstatic]

70. They could create 1250 jobs at 45k/year for that nt