Just last month, Ford, GM and Chrysler executives took serious criticism for travelling to Washington in corporate jets, where they proceeded to request $25 billion in federal loans for their ailing companies. Congress sent the executives back to Detroit, giving them two weeks to provide plans with more concrete details on how the loans would be spent. Now, on the eve of the December 3 presentation to Congress, Ford spokesman Mike Moran reports that Ford CEO Alan Mulally will drive to Washington in a 2009 Ford Escape Hybrid.
Moran said the criticism received over the last two weeks was a factor in the decision for Mulally to drive to the congressional hearings. “Being an auto company, the alternative is to drive.” Mulally will begin the 9-hour trek from Detroit to Washington on Tuesday.
Mulally has also agreed to an annual salary of $1, along with GM Chairman and CEO Rick Wagoner.
Chrysler CEO Bob Nardelli was the first to propose accepting a $1 salary in order to help his company obtain the loans deemed necessary for Chrysler to survive. Mulally and Wagoner were initially reluctant to follow suit, with Mulally voicing concerns about obtaining talented executives and Wagoner citing a previous 50 percent pay cut. With Washington giving the domestic automotive industry the cold shoulder, however, both CEOs have changed their tunes. Mulally had previously said he supports executive pay limits if it helps Ford get access to federal loans.
Nardelli’s $1 proposal is meant to mimic legendary former Chrysler president and chief operating officer Lee Iacocca. When Iacocca was brought into Chrysler in 1978, the company was on the brink of extinction-in 1979, Chrysler lost over $1 billion. That same year, Iacocca went to Congress and guaranteed a $1.5 billion loan from the government. Iacocca is largely credited with turning Chrysler back into a profitable company. By 1986, Iacocca was earning over $20 million a year, landing him at number one on Forbes’ Best Paid CEOs.
Source: Automotive News