Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Citigroup: $50 Million Private Jet Takes Edge off Recession


Nothing too luxurious for struggling bank.

If your stock trades at $3.67 a share, buying a new $50 million private jet probably shouldn't be at the top of your list of things to do.

But that assumes 1. You're sane. 2. You have half an ounce of public-relations smarts. 3. You give a damn.

The jury is still out on Citigroup (C), which recently accepted $45 billion in taxpayer funds to keep the company alive.

Nevertheless, Citigroup plans to spend about $50 million on a new corporate jet, a French-made Dassault Falcon 7X, the New York Post reports.

Citigroup is trying to sell 2 older planes, both Dassault 900 EXs. The jets are about 10 years old and are valued at an estimated $27 million.

While unrelated, Citigroup's planned expenditure is sure to be filed under "What were these chumps thinking?" by many taxpayers. News of Citigroup's new plane follows the tale of former Merrill Lynch CEO John Thain, who spent $1.2 million to renovate his office last year. He now says the expenditure was a "mistake" and plans to pay back the money. Thain sold Merrill Lynch to Bank of America (BAC) on January 1st and was kicked out last week as head of trading, investment banking and brokerage for the combined company.

So far, the brain-dead auto industry leads the PR Disaster Derby with its bone-headed decision to fly to Washington in private jets to beg Uncle Sam for a $25 billion bailout - then spending taxpayer money to thank them for the handout.

But it's only January.

The Wall Street Journal reports that 2 California towns, Victorville and Norco, plan to bail out local car dealers in an effort to retain jobs and keep sales and property-tax revenue flowing. Redlands is reviving a similar plan for its new and used-car dealers. Here's hoping the top dogs don't head for Las Vegas.

Citigroup's decision to open its wallet on an expensive jet may not be the catastrophe it appears because Citigroup ordered the plane 2 years ago when the company had plenty of cash. There may be a stiff cancellation fee, so public-relations problems aside, it might make sense to buy the plane.

The Falcon 7X can cruise 5,950 miles without refueling and has a top speed of 559 mph. It might be a good idea for the company to have a private jet, given its worldwide operations. But if you're flying on someone else's dime, there's always coach on a commercial flight.

Given the fact that most Americans don't appear to support the bailout, buying a new plane -- from the French, no less -- looks like another case of PR foot-in-mouth disease for a struggling American company.

As manager Casey Stengel said about the hapless 1962 New York Mets, "Can't anybody here play this game?"
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos