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Ford Picks Up PR Points for Declining Auto Bailout

Experts Say Move Plays Well With Recession-Weary Consumers

By Published on . 2

NEW YORK (AdAge.com) -- One of the biggest beneficiaries of the auto bailout won't see a dime of that money: Ford.

Gratitude and delight
In declining any of the $17.4 billion the government is giving Detroit, Ford Motor Co. instantly earned the admiration and appreciation of a frustrated and cash-strapped U.S. consumer base that, once this recession ends, eventually will make its way back into auto showrooms.

Alan Mulally
Alan Mulally Credit: AP
Shortly after news of the bailout and Ford's decision broke, the Twitterverse was abuzz with people expressing their gratitude for Ford and their delight in being Ford owners.

At first, it didn't look so good for Ford. Alan Mulally made the same PR mistake as his fellow CEOs, GM's Rick Wagoner and Chrysler's Robert Nardelli, by flying in to Washington last month on a private jet to pitch Congress on a $25 billion bailout. But after being told to come back with a plan -- and not a private jet -- the next time around, Ford was first out of the gate with its proposed strategy. The automaker said it needed a $9 billion line of credit that it would only touch if the economy were to get dramatically worse and that it could make it through 2009 without any government aid.

Support for rivals
"We are not seeking short-term financial assistance from the government," said Mr. Mulally. "But all of us at Ford appreciate the prudent step the administration has taken to address the near-term liquidity issues of GM and Chrysler. The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy."

Doug Spong, president of Carmichael Lynch Spong, said showing support for its rivals, along with its move to refuse any of the funding, is working in Ford's favor. "Ford has been really smart about supporting the bailout package for their rivals," Mr. Spong said. "And I think, more than just turning down the bridge loan, the fact that they have actually come out and supported two very bitter but worthy competitors says as much about the corporate culture as anything. Does it long term make them the preferred brand over the others? I don't know about that; time will tell."

Finally standing out
Mr. Spong, whose agency works for Subaru of America, said turning down the money is a big coup for Ford on the reputation front. "To be able to look America in the eye and say, 'We're in a position where we don't require a helping hand in this time of need, and thank you for offering it, but we will pass,' shows a lot," he said.

One PR agency CEO who asked not to be identified said aside from making a statement about the viability of its company, the rejection of the bailout money finally allowed Ford to get out from under the Big Three blanket. "They weren't able to distinguish themselves at the hearing, and that was partly because they were sitting there with the other guys," the executive said. "But this allows them to finally do that."

The tricky part for Ford now is to leverage this groundswell of reputation and consumer goodwill without looking opportunistic but still make sure it is on top of consumers' shopping lists. "If I'm counseling Ford, certainly I'm not running ads with William Ford III coming out and extolling the virtues of not having participated in the bailout and taking a pass on the free money," said Mr. Spong. "That looks too self-indulgent and would actually turn off consumers. They just need to keep doing what they are doing: support the industry and their competitors, continue to talk about how it's good for everybody when there's a healthy automotive industry; and support the public discussion and policy that favors the automotive industry and not just Ford."

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