““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Editor's Desk December 2009
TOM BUFFENBARGER heads the powerful International Machinists union, which has more than 90,000 members who work in the aerospace industry. He says he'll be watching President Obama's State of the Union address in January, and is hoping to hear an eight-word phrase he says is long overdue: "Business aviation is vital to America's economic recovery."
The acknowledgement from the highest level of government is needed because of the serious damage inflicted by politicians on the business aviation industry, Buffenbarger said in a speech to the National Business Aviation Association in October.
That the head of the largest aerospace workers union was asked to speak to leaders of the world's major aircraft manufacturers is noteworthy. Hearing him say that the union and manufacturers need to fight together for there to be hope for their continued existence was remarkable. "In normal times we face each other across a negotiating table or picket line," he said. "But these are not normal times. In this grave recession, our very survival is at stake."
More than 30,000 IAM members have lost their jobs since the recession started; the companies the NBAA represents once employed about half of them.
"I know what the public image of business jets is: fancy toys for fat cats," Buffenbarger told the audience. "I watched members of Congress play gotcha with auto executives. I watched senators grandstand on the use of business jets. I watched the president of the United States take his shots at this industry. And then I watched as thousands of Machinist union members were laid off because the politicians wanted to score some points at our expense."
Buffenbarger then suggested to the "paragons of public virtue" in Washington that they should think twice before picking up stones.
"The congressman who nailed the auto executives flew a private jet into Washington that very day," he said. "The senators who got up on their soapboxes to decry business jets didn't bat an eye as they climbed aboard one to fly off to their next fundraiser. And the president-let's just say he owes us a visit to Wichita and leave it at that."
Since taking office, President Obama has not visited Kansas, where many of the largest U.S. aerospace companies are based and where the recession has taken a terrible toll. Buffenbarger used the podium at the NBAA Convention to remind the audience that business aviation supports 1.2 million jobs in the U.S., has a combined payroll of $53 billion a year, generates $150 billion in economic output annually and added $5.9 billion to America's export revenue last year.
Buffenbarger also let it be known that he flew to the convention in Orlando, Fla., on "Eleven Alpha Mike," the union's Learjet 60. "I am proud of our jet," he said. "I am damn proud of the fact that IAM members built it. And I am proud of the millions of miles that jet has flown, to every state in the union, every province in Canada and more than 25 nations" to support picketing workers, open contract negotiations with companies like Boeing, Lockheed Martin and Raytheon, and travel around the U.S. each Labor Day to rally union members.
"Could I have used commercial flights to meet those schedules?" he asked. "Not really. They don't always fly where I need to go. They often don't have connections to the smaller communities where our members live and work. And they are never as cost-effective as Eleven Alpha Mike."
Buffenbarger's long-shot desire to hear the president defend business aviation is now in the hands of one person: Jonathan Favreau, the 28-year-old White House director of speechwriting, best known for crafting Obama's "Yes we can" campaign catchphrase. There's just one problem: Favreau is afraid of flying.
But there's still hope. The speechwriting team has already started crafting the State of the Union address. They'll have first drafts finished by Christmas. Now is the time for senators, governors and big donors from states where business aviation jobs contribute to the economy to contact the White House and ask them to add the line.
"Business aviation is vital to America's economic recovery."
I would be delighted to hear Obama utter any variation of the phrase. If we work together to press the politicians-appeal to the ones who didn't sink to taking cheap shots or engaging in class warfare-if we plead with them to use their clout to have the line included, then there is a chance.
To borrow from Jonathan Favreau, yes we can.