Was Detroit's Bailout Marketing Blitz Too Little, Too Late?

Critics Say GM's Push Aimed at Taxpayers and Lawmakers Didn't Offer Guarantees of Change

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DETROIT (AdAge.com) -- Detroit's biggest carmaker, General Motors Corp., pushed out a digital, direct, targeted print and PR campaign to try and persuade U.S. taxpayers and lawmakers to bail out it and the entire U.S. auto industry. But in the most important marketing campaign the industry will ever wage, Detroit looks to be losing.
GM has been placing online-display ads touting its investment in alternative fuels, such as the Chevrolet Volt, in sites like WSJ.com and Yahoo Finance.
GM has been placing online-display ads touting its investment in alternative fuels, such as the Chevrolet Volt, in sites like WSJ.com and Yahoo Finance.

With the clock ticking before its cash runs out by the end of this year or soon after, General Motors Corp. reached out to its ad agencies, suppliers and other vendors and the general public for help to plead its case in Washington. Various officials at the automaker sent e-mails to partners from Time Warner to its own dealers to visit a GM website, gmfactsandfiction.com, and click "Mobilize!" in support of federal assistance for Detroit automakers. The site, which went up two weeks ago, cites to third-party data from the Center for Automotive Research about the economic impact to Detroit's Big Three carmakers.

Snatching up search terms
GM has also been placing online-display ads touting its investment in alternative fuels, such as the Chevrolet Volt, in sites like WSJ.com and Yahoo Finance, and bought the search terms "GM bailout" and "auto crisis" on Google. The search and display ads link to the GM site. It wasn't immediately clear who placed the online ads, though Publicis Groupe's Starcom is its media shop.
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Taking a page from the recently concluded presidential campaigns, the industry even put its own scary video on YouTube, "The U.S. Auto Industry and the Ripple Effect," which has been viewed more than 238,000 times since it was posted on Sunday. It was created by PR shop Weber Shandwick.

Both the site and the video paint a dire picture of a world without GM. "The collapse of the U.S.-based auto industry wouldn't just impact the nearly 355,000 Americans directly employed by the Big Three," reads the website. "One out of every 10 people in America is employed in a service that is related to the U.S. auto industry. If a plant closes, so does its suppliers, the local stores, the hot dog vendors and the local restaurants."

Then it lays out some sobering figures: "Nearly 3 million jobs would be lost in the first year alone -- with another 2.5 million to follow over the next two years. Personal income in the United States would drop by more than $150.7 billion in the first year. The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health-care assistance. Domestic automobile production would more than likely fall to zero -- even by international producers, due to supplier bankruptcies."

Minor ad extension
A GM spokeswoman in an e-mail characterized this week's effort as a "minor ad extension to our existing grassroots outreach effort that was already in place on this important subject. The minor 'ad' support we just added this week (mostly targeted print, with some digital search) came about through us working within existing corporate ad budget," noting that the effort includes a mix of paid and unpaid ads: "Some media offered us space."

She said that as a result "hundreds of thousands of visitors have went to the gmfactsandfiction website and expressed their support by contacting their government officials (over 400,000 supportive letters went to Congress, as of yesterday)," not including employee, retiree and consumer calls to Congress.

Even so, the leaders of Detroit's carmakers, which in addition to GM includes Ford Motor Co. and Chrysler, left the nation's Capital yesterday without any promise of a government loan to help them survive what has turned out to be a cataclysmic economic downturn for their industry and could land one or more of them in bankruptcy court.

And the clock is ticking, as there is little time for a vote before the House adjourns today. Automakers may now have to try and hold on financially until President-elect Barack Obama's administration arrives in Washington in January -- if there's enough cash for them to survive until then.

Flawed communications effort
So what went wrong? Matthew Harrington, president-CEO of Edelman U.S., said the Big Three's communications efforts are flawed by not acknowledging that they have to fundamentally change their models. "An infusion of cash so they can continue operating as before is simply not sufficient," he said. "They must completely reinvent themselves and the social and business contract they have with all stakeholders. [They're] not being explicit about what they need to do to survive not just through a recession but longer term."

He added: "It would be good if they were took some responsibility for a decade of pushing SUVs when it was ultimately irresponsible from an energy perspective. And they're pretending like the other auto industry, the one in the south, doesn't exist and could serve as a model on some levels," a reference to car plants in the region that are now operated by foreign automakers.

Mr. Harrington does like GM's site and online campaign, noting it is clear that the automaker recognizes the importance of a multimedia push demonstrated by the "newspaper ad purchase to reach influencers and broader publics."

Ron DeFore, founding principal Stratacomm, who has more than 20 years of experience in the automotive industry, said the auto industry is not clearly articulating the reasoning behind the need for the loan. "Automakers should be asking the federal government to become partners in this lending of money so the federal government can help them restructure their labor agreements," he said.

Another PR executive, who asked not to be identified, said, "What it seems they have failed to do is make a case that would override the perception of mismanagement."

The model to have followed
Bud Liebler, who retired from Chrysler as senior VP-marketing earlier this decade, criticized Detroit car companies for failing to make their case sufficiently strongly in public before their executives testified in Washington. "Where was the pre-sell?" said Mr. Liebler, who now has his own communications firm, noting that the online push may have come too late.

He recalled that retired Chrysler Chairman Lee Iacocca signed four, full-page national and regional newspaper ads before the automaker sought government loan guarantees more than 30 years ago. The ads, from Kenyon & Eckhardt, were themed "Would America be better off without Chrysler?" and outlined the company's achievements, including technological breakthroughs. Mr. Liebler recalled that President Jimmy Carter cited those ads as persuading him to OK the loan guarantees.

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Contributing: Michael Bush and Michael Learmonth
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