By Frank Langfitt, NPR News

Morning Edition, March 25, 2009 · General Motors continues to slash costs. But even as the company asks for more taxpayer loans, there's one perk GM refuses to give up: a company car and company-paid gas for about 8,000 white-collar employees.

A former GM economist estimates that last year alone, the automaker spent nearly $12 million on fuel for its staff.

By all accounts, GM's car program is a great deal.

Rob Kleinbaum participated in it when he was a global strategist at GM in the early 1990s. He said his nicest company car back then was a Chevy Suburban with 10-way adjustable, heated leather seats.

"It's a really highly valued perk," Kleinbaum says of the program. "It's feels kind of fun. You get to drive a new car every three months. You never have to pay for it. Gasoline is always free."

The program is not quite as good today; managers now get a new car every six months.

Kleinbaum says it's one thing for a company to offer such a generous perk when it's making tons of money, but GM lost more than $30 billion last year. The company has already received more than $13 billion in taxpayer loans to avoid bankruptcy and is asking for up to $16 billion more.

Kleinbaum says continuing to provide cars and gas sends the wrong message.

"This is much like when the CEOs flew their airplanes to Washington, begging for money," he says. "It's not as insulting as that."

But Kleinbaum says the public will wonder: "Why are these guys getting free cars and free gas when the American taxpayer is paying for it?"

Kleinbaum says GM should kill the program — not because of the expense, but because it reinforces a corporate insularity for which GM has been criticized in the past.

Kleinbaum says the perk prevents GM employees from fully understanding what customers want and what they go through.

Kleinbaum says when gas hit $4 a gallon last summer, GM employees who enjoyed company-paid gas missed the pain consumers felt in their wallets.

"I would be totally in favor of eliminating this benefit," Kleinbaum says. "More because it would drive everybody in the company to be much closer to the marketplace and so they kind of feel the same things their customers feel."

GM would not speak on tape, but a spokesman defended the program, which has been around for at least 50 years. He said the perk is part of white-collar employees' overall compensation, which GM says is competitive with Toyota's and Honda's.

And the benefit is not entirely free. For instance, managers pay a $250 administrative fee each month to participate.

GM says other companies have car programs, too. But both Ford and Chrysler say they don't provide gas for such a huge swath of employees.

For instance, Mark Truby, head of Ford's corporate communications, said he pays for gas out of his pocket and is not reimbursed.

GM insists its employees appreciate the impact of high fuel prices, but one current GM staffer interviewed for this story said the perk does blind some people. He recalled that when gas spiked last summer, a colleague complained.

It wasn't because of the cost. It was because he had to swipe his credit card twice to fill up the tank of his big SUV.

Inside GM, the perk is formally called the Product Evaluation Program. The company says it's an important tool to improve vehicle quality. Employees must make routine reports to an internal Web site and immediately identify problems.

But one former GM economist questioned the program's value.

Walter McManus worked at General Motors during most of the 1990s and now runs the auto analysis division at the University of Michigan's Transportation Research Institute.

"I'm not aware — when I was in market research or in product planning — of anyone at GM ever using the information for any sort of analysis or any product development decisions," McManus said. "No one that I knew took it seriously."

GM disputes that; a spokesman said employees provide frequent, critical feedback for engineers.

General Motors won't say what it spends on the program or even how much it spends just on gas.

But using GM numbers and recent federal data, McManus and I tried to come up with a number. The annual cost for gas last year — as best we could figure — was nearly $12 million.

GM has talked about ending the program, but a spokesman said employees have built their lives around it. It allows many to live far from their offices and commute at little expense.

The spokesman said killing the program now would be "extremely" disruptive.

http://www.npr.org/templates/story/story.php?storyId=102316176


When I heard this, I was so surprised.

I feel that it's not very smart of them to do this when they are on the brink of closing.

I, also, feel that it's wrong for them to do this when they are taking taxpayer's money to keep afloat.

The money was given to them to do as they wish.
Who signed the check?

GM has been getting federal help for a while....yes to help keep people employed. but as with AIG....is this another case of loop holes? I think they can get their own cars IMO....but has the government tried to put amendments into the bail outs to prevent this?

When a company is whining about needing help, do you think they should be paying $12 million on fuel for its staff?

No one put in put in any stipulations on how it should be used. A bit of an oversight?
It does suck, the rich are so wasteful.
Let 'em feel the crunch. Let the execs take pay cuts.

if a parent keeps giving in to a whining child...what does that do for the child? there has to be something done to get rid of the loopholes.

You didn't answer the question.

Sorry.
No, I think the 8,000 execs should get a pay cut and GM work on making their products more energy friendly and less expensive, and bring back the jobs they farmed out to other countries.

I think the blue-collar GM employees should get a free company vehicle as well.


It's only fair.

Interesting.

Just goes to show what happens when you rush into something and dont read what it is they ae signing. I think if they would have waited and went over what to do instead of just handing out money we could have done things a little better.

Are groups going to send bus loads of people to their houses to protest?

They gotta spend that bailout money somewhere....they know they are going down the drain so let's party and throw the money around 'till it lasts.

In the OP I spotted this...

"GM has talked about ending the program, but a spokesman said employees have built their lives around it. It allows many to live far from their offices and commute at little expense."

We live in the era of the internet... It is an unnecessary expense. I don't care if the help the fed is giving them last but a month...

As that "money" came from us... They better sure be cutting every stupid program and fixin the way they do business... Else I sure better not see any more money flowing their way.

Why doesn't this surprise me. Along with the bloated union benefits and the money for alternative-fueled vehicles that was wasted, I say let them go down the tubes.

Toyota will take over and make decent cars in their old factories. Made here by Americans and with parts made in America.

It will be nothing but a name change.

I had a theory a long time ago, but of course no one took me seriously...not sure anyone would do now..

the American car companies have been in trouble for a fairly long time, going back to the late 70s.

There is simply no competition whatsoever when it comes to a an every day car you use for shopping etc... someone offers you a Chevy Lumina or a Toyota Camry...guess which one I'm taking..

So anyway..the US car makers could have survived...if they' stayed making exotic "one of a kind" cars instead of trying to keep up with the rest from Japan or Germany and bankrupting themselves trying to go as cheap as possible, while struggling with Unions and paychecks and dealing with massive recalls which costs billions.

Exotic "one of a kind" should have been my favorite cars..muscle cars..sports cars..unique in a way of carrying a badge. Like Harley Davidson motorcycles which is well respected and there is a demand for it. Look at Harley...they tried to do some market with the Buell..but it's a fraction and "no race" to go ahead with sport motorcycles like Kawasaki or Suzuki. Harley should stay Harley and Suzuki a Suzuki.
Look at Italy. There aren't many italian cars, and if there are..they are nothing much to talk about beside the well known Ferrari and Maserati etc..., they survive.

Even if they have done nothing but concentrate on 4x4 trucks only and further improve instead of trying to get into a race with others, who are 10 years ahead and already put their feet through the door.

I'll get that Honda Civic or whatever for every day nuisances and if my budget would allow (not right now)...I'll get that Corvette or Mustang for the weekends and the beach....

Now, will you answer my question? Who gave ultimate authorization to hand over the dough to GM?

I used to work for Allison Transmission, who makes trannys for GM vehicles. When GM sold Allison, the execs and managers found out that they were going to lose their free vehicles (corvettes and other sports and luxury cars). I have never heard a whinier bunch of people - they actually contemplated "striking" to try to retain the vehicle rights.

I had a hard time feeling sorry for them, especially when one exec was complaining to another that she was actually going to have to buy a car and live like "the others".

I find it interesting that Ford and Chrysler don't provide gas for their employees that use company cars but GM does.

maybe that's one reason Ford doesn't need any bailout money