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Leif Parsons

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A Nosedive in Orders for Executive Jets

The corporate jet industry is in a tailspin, as a fierce public backlash against executive perks has companies scrambling to cancel orders for new planes and unload the ones they own. Jetmaker Dassault Aviation in Paris had 27 more cancellations than orders in the year's first quarter as such customers as Citigroup (C) and Royal Bank of Scotland (RBS) scrapped plans to buy its Falcon 7X executive plane. Wichita-based Cessna Aircraft (TXT) has laid off 42% of its workforce and suspended development of its Citation Columbus jet as it copes with 92 first-quarter cancellations and braces for a predicted 150 more by July 1. (Neither company will say how many new orders they have.) Meanwhile, companies ranging from Big Three carmakers to French telecom supplier Alcatel-Lucent (ALU) are putting their planes up for sale. About 3,100 jets are on the resale market worldwide, up from 1,800 a year ago.

After reaching record highs in 2007, orders for new jets began dropping last year, as customers tightened their belts. Sales then nosedived after Detroit auto executives came under fire for private-jetting to Washington last December to beg for bailouts. President Obama pumped up the volume when he took a swipe in his State of the Union speech at CEOs who "disappear on a private jet."

On May 6, Cessna CEO Jack Pelton and Gulfstream Aerospace President Joe Lombardo went to the White House to plead for an end to such rhetoric, sharing with senior aides a list of customers canceling orders after Obama's remarks. "We came away feeling that they now understood," says Pelton.

One ray of hope for the private-jet market: Brian Foley, a business aviation consultant in Sparta, N.J., says many companies have put "for sale" signs on planes they have no intention of selling. They're just waiting, he says, for the furor to die down.

—By Carol Matlack in Paris, Edited by Deborah Stead

Now, the Nano Home

Tata, the company behind India's $2,000 Nano car and its no-frills Ginger hotels, is now selling apartments to Mumbai's working poor, at prices that start at roughly $7,800. In June, Tata Housing Development will begin building 1,244 tiny apartments in an industrial area about 60 miles from downtown Mumbai. For better-off buyers, there will also be 2,000 larger and fancier units ($20,000 to $40,000). The company says it has already collected application fees from 12,000 prospective buyers of the lower-cost units. Tata isn't the only one building homes for the rickshaw drivers, factory workers, and others living in rented apartments or slums. But it is the most prominent business to move into this largely untapped segment. Tata Housing's managing director, Brotin Banerjee, citing a shortage of 24 million homes in India, says Tata plans similar projects around the country.

Measured by "carpeted area," the smallest Tata units are 218 square feet. To attract slum dwellers now in central Mumbai—where it's possible to eke out a living with a makeshift barber shop, tailoring service, or repair business—the development will also have space for informal businesses, including "hawker" zones, for selling food and other items. Jeb Brugmann, co-founder of advisory firm Next Practice, says the project "will only work for low-income households and urban migrants if it allows them to establish entrepreneurial activities." Tata's Banerjee says it was after his team interviewed slum dwellers that Tata decided to add pricier homes to the mix—not just to make more profit but so that the poorer residents could find work as household servants.

—By Prashant Gopal, Edited by Deborah Stead

Geniuses at the Gate

As President Obama pushes for an overhaul of immigration rules in coming weeks, undocumented workers and their supporters will once again square off against their critics, and U.S. tech workers will rail against any increased hiring of skilled foreigners with H-1B visas. Removed from the bitter debate: a growing program that dispenses what are known as "genius" visas. Officially called O-1s, the visas go to those with extraordinary abilities in the arts, science, education, business, and sports. The U.S. State Dept., which grants the visas, says roughly 9,000 O-1s were awarded last year, up 40% from 2004. Among current O-1 holders: Dallas Mavericks forward Dirk Nowitzki (from Germany) and various members of the Merce Cunningham and Bill T. Jones/Arnie Zane dance companies. Why has the rise in O-1s escaped criticism? It's understood that they "produce far more than they cost," says political consultant Bruce Morrison, who drafted the O-1 legislation in 1990 as a Connecticut congressman.

—By Moira Herbst, Edited by Deborah Stead