GM sets expenses policy under U.S. guidelines

GM sets expenses policy under U.S. guidelines
Chrissie Thompson
Automotive News | September 15, 2009 – 4:07 pm EST

General Motors Co. employees using company funds for travel costs must stay in standard single rooms, rent cheap GM cars and, unless they’re top-level executives, buy the cheapest economy airline tickets available.

The company’s board of directors approved staff expense guidelines outlining these rules last week, and GM sent them to employees today, spokeswoman Renee Rashid-Merem said. The rules apply to employees, members of the board of directors and contractors who are on GM business.

“Expenses must have a clear business purpose,” says the policy, which is posted on GM’s Web site.

GM began facing public attack on its expenses last November when then-CEO Rick Wagoner used a private jet to fly to Washington to lobby Congress for aid for the struggling company.

The company canceled its jet leases as part of its government-sponsored bankruptcy, which ended July 10.

The new expense policy instructs employees to buy economy air fares in advance to get the lowest price they can. They may book a higher-class fare for flights that last longer than about eight hours.

CEO Fritz Henderson, Vice Chairmen Bob Lutz and Tom Stephens, GM’s executive vice presidents and members of the board of directors can purchase noneconomy fares on any flight.

Exceptions for private flights

Employees generally can’t travel on other companies’ aircraft. They can receive permission from someone from the senior leadership group, which includes GM’s vice presidents.

Traveling on other private aircraft is allowed “only if economically justified with supporting business rationale,” the policy says. Henderson must approve such flights for events in North America, and David Reilly, head of GM’s international operations, must give permission for private flights outside the continent.

Henderson, Lutz, Stephens and the board of directors can charter a flight only for North American travel if they state a “clear business rationale,” the policy says.

When renting a car, employees must rent the cheapest GM vehicle available at the smallest size necessary to conduct business.

For extended hotel stays, employees must request reduced rates for their standard single rooms.

Approvals needed

Internal events that cost more than $10,000, such as those held to honor GM employees, must have the approval of someone from the senior leadership group.

Nick Cyprus, GM’s controller and chief accounting officer, can approve requests to break any of the expense policies if he documents them. He also can delegate that responsibility.

Employees who violate the policy can be disciplined and possibly fired.

The expense guidelines comply with requirements for recipients of aid under the government’s Troubled Asset Relief Program, the source of GM’s federal aid, Rashid-Merem said.

When GM first received federal aid this past winter, the company adopted a policy that is essentially the same as the one sent to employees today. In releasing the current plan, Rashid-Merem said, GM was certifying it to comply with TARP rules.


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