Obama tells Citigroup to "Fix it!"

[BetterThanEver]

24 hours after receiving $45 billion in tax funds, Citigroup caves in and abandons plans for their $50 million corporate jet upgrade from France. Citigroup already has 2 other corporate jets and a helicopter. Obama called them personally and told them to "fix it."

Hell yes, if we are going to give Citi our money, they better not be spending it all crazy. They will just have to get by with 2 jets and helicopter.


----------------------------------------------------------


The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.
The bank used TARP funds to purchase a new corporate jet for executives.

The decision came 24 hours after the banking giant, which was rescued by a $45 billion taxpayer lifeline, defended buying the state-of-the-art Dassault Falcon 7X -- one of nine to be flying in U.S. skies -- as a smart business deal.

The jet, the epitome of corporate prestige and privilege, can carry 12 passengers in elegant comfort.

ABC News has learned that on Monday officials of the Obama administration called Citigroup about the company's new $50 million corporate jet and told execs to "fix it.
Earlier on Monday, White House spokesman Robert Gibbs said made it clear ABC News asked him about the jet that the president disapproved of the deal.

"The president said this during the transition, as it related to the auto companies using private jets: [He] doesn't believe that's the best use of money at this point," Gibbs said.

The company today issued a statement saying, "We have no intent to take delivery of any new aircraft."

Citigroup had argued it was selling two of its four other planes to pay for this one, that the new jet would be more efficient and, besides, it had already signed a contract for the jet. Breaking that deal would cost the bank millions in penalties.

The Citigroup air fleet will now shrink from four jets and a helicopter to two planes.

Citigroup was apparently not deterred from shopping for a new jet despite the outrage that erupted when Detroit's auto barons used private jets to fly into Washington to plead for handouts. The giant carmakers later got rid of their jets after being granted a $17 billion financial lifeline in taxpayer cash.

[BetterThanEver]

http://abcnews.go.com/Business/Politics/Story?id=6740011&page=1

[bigtexxx]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.

[GuerillaBlack]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.

WHAT?!?!?!?!?!?!?!?!?!?!

[bigtexxx]

WHAT?!?!?!?!?!?!?!?!?!?!

OOOKKKKKAAAAAAAAYYYYY!!!!!

[BetterThanEver]

Here's the jet. It's the Dassault Falcon 7X. I was wrong about Obama calling personally. He had an aide call them.

$50 million luxury jet, there are only 9 Dassault Falcon 7X jets that fly in the USA. It's very exclusive.


http://www.flightglobal.com/blogs/aircraft-pictures/2008/05/16/falcon7xlarge.jpg

[insane man]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.

:eek:

[fadeaway]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.

I think the fabric of the Internet just ruptured. :eek:

[fmullegun]

HAHAHAHAHAHA


they got TARP and decided to best spend the $$$$ they were gonna order executive jets? FROM FRANCE????

:mad: :mad:

[pirc1]

:eek:

World coming to an end tomorrow. :p

[Major]

HAHAHAHAHAHA


they got TARP and decided to best spend the $$$$ they were gonna order executive jets? FROM FRANCE????

:mad: :mad:

To be fair, they ordered it years ago, and have to pay millions to break that contract (which is what they are doing). They claim the new jet was going to save them money in the longrun, but I imagine that uses some pretty silly math (ie, saves money over 50 years! or something).

[fmullegun]

To be fair, they ordered it years ago, and have to pay millions to break that contract (which is what they are doing). They claim the new jet was going to save them money in the longrun, but I imagine that uses some pretty silly math (ie, saves money over 50 years! or something).
oh, dang that sucks I wonder how much that had to pay to break the contract?

[Air Langhi]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.

Is the world going to end tomorrow?

[insane man]

oh, dang that sucks I wonder how much that had to pay to break the contract?

i think i read 4 mil.

[KingCheetah]

This is an absolute moronic move by Obama -- real presidents don't mess with the minor affairs of day to day business in America.

[DonnyMost]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.


Ok. The impossible has finally happened.

We can close the D&D now.

Nothing will ever top this.

[robbie380]

what a bunch of idiots running the show at Citi. Give me a break.

In this instance, Obama has done something right.

http://www.thegodfreyweb.com/christmas/images/2003FlyingPig.jpg
http://site.steelcityauctions.com/hellfo.jpg

[rhadamanthus]

http://d.yimg.com/us.yimg.com/p/uc/20090127/ljd090127.gif

[KDavis]

I just want to be part of this thread.

Good for you Texx.

[DaDakota]

Any money should come with potential penalities for executives that waste it.

Audit them and tell them stuff like this can lead to jail time....if you want the money you have to agree to more prudency and oversight until it is paid back.

DD

[rrj_gamz]

To be fair, they ordered it years ago, and have to pay millions to break that contract (which is what they are doing). They claim the new jet was going to save them money in the longrun, but I imagine that uses some pretty silly math (ie, saves money over 50 years! or something).

Probably so...a good decision, although I hate for $$$ to be pissed away on penalties...

[JuanValdez]

They claim the new jet was going to save them money in the longrun, but I imagine that uses some pretty silly math (ie, saves money over 50 years! or something).

I don't think so. But, the alternative they are comparing to is probably flying in their old jets, not booking seats on a commercial airline. If there is a valid business reason why they can't fly commercial, they should probably get the jet.

[Major]

I don't think so. But, the alternative they are comparing to is probably flying in their old jets, not booking seats on a commercial airline. If there is a valid business reason why they can't fly commercial, they should probably get the jet.

I agree that they are comparing to flying their older jets. But even then, it would be hard to save $50 million by flying a newer jet unless you're looking at a really, really long time period. You'll save some in fuel (if it's more efficient) and maintenance, but it would be difficult to get to $50 million in any short period of time.

[JuanValdez]

I agree that they are comparing to flying their older jets. But even then, it would be hard to save $50 million by flying a newer jet unless you're looking at a really, really long time period. You'll save some in fuel (if it's more efficient) and maintenance, but it would be difficult to get to $50 million in any short period of time.

I think they are comparing the operating costs. They sold 2 of their old jets to pay the capital expense. Which is funny -- they had 4 jets and sold 2 expecting to get a shiny new one. They can't get the new one, but can't have the old ones back either.

[Rocket River]

Any money should come with potential penalities for executives that waste it.

Audit them and tell them stuff like this can lead to jail time....if you want the money you have to agree to more prudency and oversight until it is paid back.

DD


At the least make it put wholes in their golden parachutes!
That money comes directly out of their pockets

Rocket River

[tulexan]

If they sold two planes to pay for this one, I don't see what the problem is. This kind of public scrutiny is getting a little ridiculous.

[Major]

I think they are comparing the operating costs. They sold 2 of their old jets to pay the capital expense. Which is funny -- they had 4 jets and sold 2 expecting to get a shiny new one. They can't get the new one, but can't have the old ones back either.

Ah ha. I had somehow missed the part that they were selling two other planes. This is entirely a PR thing then. Kind of sucks for Citi - although they'll probably really save money by flying commercial.

[pgabriel]

If they sold two planes to pay for this one, I don't see what the problem is. This kind of public scrutiny is getting a little ridiculous.

so you don't think the government has a right to object to certain expenses given the bailout money they have received?

[Major]

so you don't think the government has a right to object to certain expenses given the bailout money they have received?

Well, if they sold two planes to buy one that will have lower maintenance costs, it just lowers their total expenditures, so it's actually a good thing in absolute terms. The big question is what is the net effect of selling two planes but not buying the new one - hopefully that saves even more money.
.

[tulexan]

so you don't think the government has a right to object to certain expenses given the bailout money they have received?

In this case no, I don't think they have a right to do so. I seriously doubt that this expenditure was an impulse purchase by Vikram Pandit over the last few days/weeks. The fact that Citi sold two other jets in order to purchase this shows me that they are trying to save money. I know the jet costs $50MM, but what is the actual net cost after selling the two jets. And what is that cost compared to the breach of contract cost that they are likely to incur for canceling the order?