Geithner forces Citi to cancel jet order

http://www.ft.com/cms/s/0/e4093646-eca6-11dd-a534-0000779fd2ac.html?nclick_check=1

by condor • 17 years ago

19 28 17 years ago

ft.com

mhb2• 17 years ago

The car companies that had to give up their jets aren't too happy about it either. And so goes nationalization.

http://www.freep.com/article/20090126/NEWS15/90126063/1001/N...

mhb2• 17 years ago

More accessible article: http://www.foxnews.com/politics/2009/01/27/citigroup-nixes-p...

Gibbon• 17 years ago

Looks like they were going to buy a Dassault Falcon. I wonder how these kinds of decisions will affect Aerospatiale/Dassault? It's not like they make a lot of them.. last year they made eight Falcons per month. They've already fired all their temps and cut back on subcontractors hours.

It just goes to show, you can't win for losing. One more notch in the economic death spiral.

paulgb• 17 years ago

If it prompts you to log in, use this link: http://www.ft.com/cms/s/0/e4093646-eca6-11dd-a534-0000779fd2...

gojomo2• 17 years ago

Don't jet companies deserve 'stimulus' too?

amobilebiz• 17 years ago

While the theory of your comment makes complete sense to me, I do have a problem with French (and no offense to the French people here) companies getting my tax dollars. Last I checked (and I could be wrong) Aerospatiale-Dassault was a French company. If U.S. companies are going to be buying corporate jets with my tax dollars I would much rather they buy them from U.S. companies.

gojomo2• 17 years ago

What a fine recipe for recovery: every nation for itself, make companies buy only what's politically-favored, reduce competition, reduce world trade.

(Those were all popular-but-misguided mistakes that made the 1930's depression deeper and longer.)

gaius• 17 years ago

The French could equally well object to Dassault buying any components from American companies (such as engines from GE).

ckinnan• 17 years ago

It is far more offensive that Citi is still using tax dollars to pay its shareholder dividend.

aaronblohowiak• 17 years ago

Can you please provide some documentation for that? I'd be really interested in learning more!

Hexstream• 17 years ago

I think it goes something like this:

The People paid taxes to the government for the bailout, Citi got some of that money, which allowed them to survive, which allowed them to pay dividends to its shareholders.

Therefore, Citi is using tax dollars to pay its shareholder dividend.

dockd• 17 years ago

Why must the shareholder get stuck holding the bag? It's not like they get special inside knowledge or treatment. We're punishing the people who bought Citi's story instead of the ones who ran it into the ground?

dantheman• 17 years ago

Because they get compensated for the risk they are taking. Now if the shareholders want to sue or overthrow the management they have that right.

mattmaroon• 17 years ago

Because that's the point of being a shareholder. We're not punishing anyone. The real question is why should the government reward people who bought bad equities?

reitzensteinm• 17 years ago

So you'd rather punish the US taxpayer, who very likely has no direct investment in the company (outside of index funds), and has nothing to gain if the company does well? Sure, it sucks for the shareholders, but that's exactly what they signed up for - a share of the companies returns in good times and bad.

Dilpil• 17 years ago

This is why the terms should have been decided before, rather than after these loans were given.

cabalamat• 17 years ago

While they're at it, make them fly economy class.

DanielBMarkham• 17 years ago

As a taxpayer, I'm glad they canceled the order -- if it made business sense to do so. If it was just to look good (and they end up spending more money without the jet) then double bad on them.

As a pilot? A Falcon 6X? 5950 nautical mile range? 3 engines? Complete glass cockpit with lots of standby gear? Have you seen that cabin size? The possible configurations? Anybody like to have a private ride you could pick up in DC and get off in, say, Milan?

What were we talking about again?

gcheong• 17 years ago

"That money should be used to lend to consumers to get the economy moving again"

Maybe the problem was they didn't write that on the back of the check when they made the deposit.

gills• 17 years ago

Maybe the problem is that Americans are already bursting at the seams from too much debt and no matter how far you stuff that firehose down the pig's throat it just can't hold any more.

So no matter how much CONgress wants the banks to lend, it just doesn't help.

pragmatic• 17 years ago

Anybody else see a problem with 1) the government propping up companies that should be reorganized by bankruptcy 2) taking over these zombie corporations like head crabs 3) and then interfering in all kinds of business decisions?

Air travel post 9-11 is ridiculous in this country. How Citi spends Citi's money is between Citi and Citi's shareholders. Except when the government intervenes.

Now we have a giant mess. Now every interference can be made in the "public interest." Why do employees get free coffee? Why do employees get gym memberships. What about education reimbursement?

What is in the "public interest" now?

jfornear• 17 years ago

I agree 100%, but supposedly the sky would have fallen if these companies would have gone bankrupt? (I have yet to be convinced of this)

hardik• 17 years ago

From my understanding, there certainly would have been huge crack in the system had some of the big ones gone down just like that. This is because of the incest-like inter-connection between the major players; if one fails, it reneges on its derivative obligations, leaving several others' "naked" to risk. Those affected by this would have either lower credit rating or may not be able to fulfill their derivative obligations and so on.. domino effect. So, agreed, some of these biggies just had to be stopped from failing (AIG was the king of them) But what I fail to understand is that why is the government supporting these on an on-going basis? I would expect the government to strictly save them on the terms that they eventually wind down the operations or at least break up and sell to interested parties. It is very important for companies to fail every once in a while; in this special case the govt. should have helped soft-land their failure not prevented it!

Geithner forces Citi to cancel jet order

Related Stories