GM Admits Past Wrongs, Pleads for a Lifeline in Open Letter

Ad in Trade Magazine Confesses to Managerial Missteps

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DETROIT (AdAge.com) -- As Congress works out the details on federal-loan legislation for Detroit's carmakers, General Motors Corp. took its case directly to industry leaders with a stunningly frank ad in this week's Automotive News.

In the full-page, open-letter-style ad, GM said, "While we're still the U.S. sales leader, we acknowledge we have disappointed you. At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S market. We also biased our product mix toward pickup trucks and SUVs. And we made commitments to compensation plans that have proven to be unsustainable in today's globally competitive industry."

In the ad, GM said it has learned from its mistakes and is retooling for the future, while explaining why the "perfect storm" of economic issues created the need for federal help.

Let's be honest
GM created the ad internally, and its corporate ad agency, McCann Erickson, Birmingham, Mich., put it together, a GM spokeswoman said. The goal was for the automaker to be "forthright and candid" to industry insiders and consumers about past mistakes and how GM has addressed them, she said.

At this point, GM is studying whether to create other relevant, targeted ads that could run this week or next, but it depends on what Congress does and when, the spokeswoman said. "We are trying to be flexible and implement them fast, as appropriate."

Lawmakers in Washington are trying to hammer out a bill for short-term loans that are expected to total some $15 billion to GM, Ford Motor Co. and Chrysler. The trio sought a combined $34 billion last week.

Wagoner as whipping boy
As the process grinds on, GM Chairman-CEO Rick Wagoner is increasingly in the line of fire from several key congressmen involved in a bipartisan bill, with talk that he step down in exchange for the loans.

Congress is considering options and conditions as part of the bailout, including forcing an automaker to file for reorganization under Chapter 11 bankruptcy if it doesn't meet loan terms and banning the companies from lobbying against states' global-warming initiatives, according to Automotive News.

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