Even as GM's crying for a government bailout to save its failing business model, it looks like execs are still enjoying their perk-and-ride practice.
The auto company's burdensome union contract obligations are often cited as the reason that the Detroit automaker is flailing as an ongoing business concern, but there's plenty of blame to go around. The New York Post reports that some 9,000 managers currently have the option of cruising around in brand new cars for $250 a month--repairs and insurance included. Gas is expensable on the company's dime, which may explain the automaker's lag when it comes to producing fuel-efficient vehicles.
Because gas is a virtual freebie, many managers opt for vehicles like the $55,000 Cadillac Escalade, which they can drive around for a pittance. GM's board recently expressed confidence in its CEO Richard Wagoner, who will testify in front of the Senate Banking Commitee Tuesday, alongside officials from the United Auto Workers Union.
The auto industry is already in line to receive a $25 billion loan from the federal government to re-outfit itself to produce hybrid or alternative energy vehicles. GM is asking for an additional $25 billion bailout to rescue it from bankruptcy. The company is on schedule to run completely out of cash shortly, with huge income report losses and falling sales.