GM's Monthly Ad Budget in Bankruptcy: $40 Million to $50 Million

Automaker Plans to Spend at Same Rate as Before Chapter 11 Filing

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DETROIT ( -- General Motors Corp. has been tight-lipped about what it's planning to spend while in bankruptcy, but Ad Age has the answer: $40 million to $50 million per month, which comes out to about same dollars-per-vehicle rate as before it filed for Chapter 11. That translates to between $80 million and $150 million, depending on how long it takes GM to dig itself out.

Mark LaNeve
Mark LaNeve
The numbers come from the automaker's top marketing official, Mark LaNeve. The company's VP-sales, service and marketing for North America had dodged several Ad Age inquiries on the subject and, in fact, on June 4, said, "We do not disclose absolute ad budgets." That was until last night, when he answered queries sent by this reporter via e-mail to John McElroy's "Autoline After Hours," a weekly live web cast show that featured Mr. LaNeve as a guest.

He said the government's auto task force never prescribed an ad budget for GM during the expected 60 to 90 days the company will be in Chapter 11 before the "new" GM exits bankruptcy court. He also said that before the task force approved GM's proposed ad budget, it did its "due diligence," asking the car marketer how much it spent per vehicle on ads. It also sought data on competitive ad spending, such as how much Mercedes-Benz spent vs. GM's Cadillac brand.

Chrysler had a very different experience with the task force. Testimony in Chrysler's case, filed April 30, revealed that the task force cut the automaker's proposed ad spending basically in half, to just $67 million, during its planned nine weeks in bankruptcy.

The auto task force also had been reticent about revealing GM's Chapter 11 ad allowance. A spokeswoman for the task force said within days of GM's June 1 filing that the automaker had "proposed a DIP [or debtor-in-possession] budget that has been approved" by the task force and stressed that the Obama administration "is not in the business of managing the day-to-day activity at GM and cannot comment on operational practices like advertising." When reminded about the task force slashing Chrysler's ad-budget request, she said, "It's true that there was significant scrutiny of the Chrysler debtor-in-possession budget."

GM CEO Fritz Henderson said earlier this week in a web chat with reporters that many familiar names and faces will be leaving the automaker as part of its efforts to go faster with a leaner management. When Mr. LaNeve was asked during the 60-minute program whether he's staying around GM, he said, "I certainly hope so."

He also revealed that the media flight for GM's "Reinvention" ads is nearly complete. ( Deutsch, Los Angeles, created the TV ads; Interpublic Group of Cos. sibling McCann Erickson, Birmingham, Mich., did newspaper ads and online owner-testimonial videos). Mr. LaNeve said he doesn't like to advertise the corporate brand, but with the flurry of negative news about the company in recent months, the current blitz was designed to address the bankruptcy and reassure customers about GM's future.

It seems to be working: GM is having an even better sales month in June than it did in May, when it tallied its best U.S. sales month of the year.

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