Flying coach, just like everyone else – Judge Grants GM Approval to Cancel Jet Leases

June 19, 2009 at 11:50 am

(Source: Washington Post & Reuters)

General Motors executives will now fly commercial.

Image Courtesy: Autoblog

In a move that reflects the leaner company GM is seeking to become, the automaker on Thursday sought approval from a federal bankruptcy judge to terminate leases for all seven of its corporate aircraft, plus a hangar at a Detroit airport. Facing no objections, Judge Robert Gerber granted the request during a hearing in a Lower Manhattan courtroom that lasted less than 10 minutes.

“The new GM will have no jets — we’re all flying Delta,” GM spokesman Tom Wilkinson said in an interview.

The planes are leased from a division of General Electric and include five mid-range Gulfstream G350 business jets and two ultra-long Gulfstream GV jets, according to court documents.

Then-GM chief executive G. Richard Wagoner Jr. had been assailed by lawmakers at a hearing in November when he and other auto executives flew to Washington on private jets to ask for government funds. In March, Wagoner was pushed out by the Obama administration, which has pumped billions of dollars into GM and Chrysler.

In a recent court filing, GM said it was exercising “sound business judgment” in seeking to end the contracts. “The leases are not necessary or valuable to [GM’s] business activities,” the automaker said in the filing.

Corporate America has long argued that using private jets is a safety precaution and a way to maximize busy executives’ time by allowing them to avoid delays at crowded airports.

Chrysler also recently terminated its two aircraft leases. A spokesman for Ford, the only one of the Big Three Detroit automakers that hasn’t taken taxpayer funds, said the company is seeking to sell its five jets, which have been grounded since late last year. Ford’s chairman and chief executive have been chartering flights on an as-needed basis, the company said.

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