GM's We All Fall Down Imagery Doesn't Fit

General Motors gave thanks this holiday week to the millions of taxpayers who helped bail them out last year. The timing of the ad is at least better than Chrysler's failed attempt at thanks in 2009 when they thanked people using a full page advertisement in the Wall Street Journal and USA Today right after they received the bailout money. At least, GM had the sense to wait for a thank you the week after they went public with their IPO and return to investor financing.

I see two desired outcomes GM wants from this particular ad. One to energize people who like the brand. Second is to get people to see GM has a fighter that didn't just lay-down after it got its money. They want people who have lost faith in GM to know the brand is getting up, not giving up and wants to be seen as a survivor and champion.

The imagery used in the ad is all about not giving up. It shows several historical and socially recognizable clips when it looked over, but the people in the ad did not give up and found the strength to win.

The biggest criticism I can see from the imagery used is that all if it showcases individuals who got back up using their own freewill and not through a helping hand. No one gave the boxer a 5-hour energy drink, shoulder massage and pep talk to rise up from the mat. Sure someone helped Evel Knievel up from his accident but he got back on the bike himself and kept going.

The Henry S. Truman image makes no sense. That was just the Chicago Tribune showing how low their opinion was of Truman. There was no falling down, just miscalculation.

Perhaps Popeye is the most relevant image as he gets his boost from an outside source - spinach. But unlike Wimpy, Popeye probably didn't have to borrow the money today with the promise of paying it back Tuesday. Cynics might think Wimpy was the better image to use..?

It would be interesting to see how they tested this ad. Did GM bring in people upset with the bailout or did they focus test against people open to seeing GM as independent again. My guess is more the latter. Perhaps it has a chance of getting people 'on the fence' to see GM as a fighter and survivor.

Personally, I think they are fighting the good fight. GM has not laid down and they are trying hard to win back public opinion. Unfortunately, this ad falls down in its ability to recycle history as a way to repair GM's image. Fortunately, their new products are giving them a true fighting chance.

GM Markets Loan Payment News

At the end of last week, General Motors proudly announced they have paid off the $8.1 billion loans it received from the United States and Canada. To mark the momentous payoff that was made five-years ahead of schedule, GM followed the announcement up with a new TV commercial featuring CEO Ed Whitacre and an email to GM's customers or potential customers.*

GM had a rough last year after it went through two CEOs and a bankruptcy. Part of the bankruptcy has been a groundswell of people who are angry with GM's decision to ask for government money so it is no surprise the loan payoff announcement last week was big news to hopefully win back customers angered by the government handout.

But was it really a loan payment or simply "an elaborate TARP money shuffle," as Senate Republican Chuck Grassley claims?

The issue is in regards to TARP funds being used to make the loan payment last week. The Troubled Asset Relief Program (TARP) was designed mainly to give money to financial institutions in exchange for future equity that government hopefully can recoup in the near future. In GM's case stock shares are given as equity when the company goes public, possibly later this year. Basically, TARP is a loan against poor assets or to some a bet on future potential of the company.





Grassley and others think GM simply took $6.7 billion of its TARP money to payoff the $8.1 billion in loans it took. This is not sitting well with those who feel the company simply shuffled borrowed government money around to give the impression the government was paid back.

Of course, the email message above says nothing about TARP funds being used or that the government is still owed a significant amount of money it hopes to get some day from the equity the government know owns in GM.

Sorting this all out gets a bit complicated. According to the New York Times, "about $43 billion that G.M. borrowed from the Treasury has not been repaid because it was converted to a 61 percent equity stake in the company. That money can be recovered only through a public stock sale, which is expected no sooner than the fourth quarter."

So was this simply a government money shuffle and more importantly does it matter?

Looking at last week's news coverage and GM's email it appears the government has been paid back and GM can now rest nicely without a government debt hanging over them. Any questions regarding GM's debt can now be dealt with as GM has given the government equity in the future company which sounds a lot better than owing a loan.

I personally think the news went very well for GM and the email was a smart touch. The only issue is will people like Senator Grassley be able to make enough noise to cancel out the positive press?

* It's tough to say who received the email above, but I'm sure I did due to signing up on a vehicle site for updates or some other GM site that asked for my email. I am not an owner though.

"Your GM Team" Wants You to Remain Calm

Now that Troy A. Clarke, President of GM North America, has gotten his wish by getting GM employees to successfully campaign the government for money (see this article in Wired back in November 2008.) He is now reaching out to the entire GM customer and potential customer database to send the email you see at left. This “Important Message from Troy Clarke…” that discusses three key messages the New GM wants people to know.

1. GM Dealers are still open for business.
2. GM Vehicles are backed by their warranties.
3. GM will build the “most compelling” vehicles with their remaining brands.

The letter from Troy is really Public Relations, not marketing, reaching out to make those interested in GM feel certain the company is standing behind its products. It’s not flashy, there are no graphics except a small thumbnail of a GM logo, and there is no attention grabbing email subject. There are no Calls to Action except one that invites the reader to the Gmreinvention.com site, but it’s hardly a Call to Action in a marketing sense.

What I wonder about this email is who read it? It had a poor subject line: “An important message from Troy Clarke, President, GM North America”. My Yahoo! email inbox cut off part of Troy’s name and hence left out his GM job title from the subject line, so it looked like spam. The account was “Your GM Team”. Well, I don’t have a GM product so why would I have a “GM Team”? Fortunately, I read everything in the email account this was sent to, since I use the email to receive all marketing correspondences from companies I follow. I doubt most non-GM owners would have read the email and I’m sure many GM owners would’ve ignored it too.

Assuming someone actually read it, what did they come away with? Did the GM email “earn your trust in several ways”, like it sets out to do? I doubt much trust was earned. What I came away with is that the dealers are waiting for customers as the email stressed that dealers are open for business; implying GM corporate is hearing a lot from dealers that people don’t know they are open, so please tell them so customers will come.

GM vehicles are backed by a “U.S. government backed” warranty. This was just another reminder of management that is not led by GM, but by government bureaucrats. Any language stressing the association of government with GM is a negative as boycotts are already underway and I would argue that stressing the association is not helpful.

The last takeaway is that GM is committed to building a company Americans will be proud of. This seems extremely premature. Especially after just recently celebrating 100 years of business, GM is now telling potential customers that they are now planning to build products the world wants.

One criticism, I hear just about everywhere is: why has it taken GM so long to build products consumers want? This one I disagree with, as there are plenty of great products that GM builds right now. The Chevy Camaro, Pontiac G8, GMC Acadia, and several other products are strong competitive products but you would not know it from Troy’s email. Apparently, nothing is really compelling today. We all have to wait for that leaner GM to build great cars. So, as a potential customer I’m supposed to wait how long before this happens? But I thought you wanted me to come to all of those dealerships that are open for business right now?

I’m sure something had to be said to keep potential consumers interested in GM’s current products, but this letter lacked the essentials to keep people interested. Instead, tell me about the offers on the car I’m interested in (you obviously got my name from a form I filled out on a Pontiac G8.) Sure stress that warranties are still backed and include some contact information about the dealerships being open and staying in my local area. Unfortunately, Mr. Clarke’s form letter ignored the product I was interested in, gave me the impression no GM products are competitive today, and it demonstrated GM is a company that is barely alive with “government back” warranties and dealers who no one knows are open.

GM deserved better than this letter and my only hope is it ended up in a lot of spam folders. I really liked what GM's Vice Chairman Bob Lutz said the other day about GM's products not being what put them in bankruptcy; rather, it was legacy costs and the difficulty of fighting legacy perceptions about the GM brand that just are not true today. GM is not a bunch of weak, uncompetitive products and that really needed to be said in Clarke's message.

Chrysler Rebuilds in Its Rubble

Earlier this week the government’s auto industry task force slashed Chrysler’s proposed marketing budget in half. As the company is under a dark cloud of a very public bankruptcy, the government is definitely making it difficult for Chrysler to stay present in consumer’s minds and worse all the negative press is making Chrysler an even less attractive decision for shoppers. This all leaves one to ponder if the Chrysler customer is down to one type of customer – the bargain shopper.

As Business Week reported, "customers are coming into the showroom making outrageously low offers for Chrysler vehicles, expecting them to take any price just to sell a car." The bargain shopper wants a deal and not just any deal, but a huge deal. Giving them $6,000 off a $30,000 plus vehicle isn’t what they expect. They want more, like 50% off. They’re the same type of shopper who is out there looking to buy a foreclosed house at half-off or more. And Chrysler is the automotive industry’s example of a distressed sale. Much like real estate’s demise, consumers are waiting to show up and get a bargain. And if the bargain isn’t good enough, they’ll wait it out. They’re not stupid.

With today’s announcement of Chrysler eliminating over 700 dealerships nationwide, the inventory situation gets worse for a company in the droves of restructuring. So, not only are consumers questioning the viability of the company. Now prospective shoppers know the market is about to get flooded with more supply as dealerships consolidate and inventory piles up with fewer retail outlets to move product.

Meanwhile, Chrysler is trying to rebuild its reputation with their new brand campaign: We Build. In the TV spots, Chrysler promotes how it is building a new car company that they are building for us. Of course, I can hear the criticism of the anti-bailout crowd – you mean we are rebuilding your company for your executives and unions.

One hopes with Chrysler’s reduced ad budget that they can sway public opinion in their favor as the campaign promotes upcoming electric vehicles and strengthens the brand’s identity of building rugged off-road products, like Jeeps and Ram trucks, that customers have come to love.

But it will be a struggle to sway public opinion with a limited marketing campaign budget. Also the recent marketing mistake they made when they ran a full-page ads in major newspapers thanking America for their first bailout last year doesn’t help either. Many will feel any advertising is money wasted where “their money” is being used to sell them. That’s the problem with very public government bailouts and meddling government task forces, people don’t like throwing good money after bad and for a lot of America, Chrysler is a weak company with weak products. They don’t show up on Consumer Reports recommendation lists, they rank low on JD Power Quality studies, and, the worse part, everyone knows they are in this position because they make inferior products in a very competitive automotive industry.

Fair or not, Chrysler has a very hard road to travel and it will be interesting to see how the new “We Build” campaign is received. I have my doubts it will be received well; though, I’m sure some focus groups will think the ad campaign improves brand perception.

Looking Back to the Great Depression to Predict the Next Automotive Campaign

We are definitely in a recession. No doubt about it. Are we in a depression? No, but that doesn’t mean we can’t learn from the greatest economic downturn in our history. Yesterday’s inauguration not only marked the beginning of Barack Obama’s Presidency; it also meant a ton of advertising from Pepsi Cola as they launched their Refresh Everything campaign.

The Refresh Everything launch gave a platform for citizens to share what they wanted to say to our new President. It combined some YouTube video upload functionality and came packaged with celebrity videos promoting everyone to engage with Pepsi’s call to share your words to the President. It was actually a decent campaign idea for a broad appeal product like Pepsi and linked the idea of the big change (aka “refresh”) everyone expected on January 20th.

It made me wonder what can we expect from automotive advertising as the recession deepens and marketing turns to use the language of the times? So, I went back into history via Google, of course, and found an example used during the height of the Great Depression. The Plymouth advertisement (above) ran in 1935 and used the headline "New Deal for Farmers" playing off of President Roosevelt's famous "New Deal" economic policy.

The Plymouth ad shows how little has changed in 74 years. "High-Powered", "World's Safest", and "Long-Life". Today's version: "0-60 in xxx", "5 Star Crash Rating", and "JD Power Quality Award". The "Saves 12% to 20% in Gas and Oil" line made me think of Toyota's latest ad for the Tundra where they claim less transmission fluid needs than their competitors.

So we have some language already in play in the economic environment: Change and Bail Out. I have already heard radio ads from a local mortgage company advertising; “it’s time for your own bail out with our refinance mortgage options…” It’s only a matter of time before Obama’s call for Change becomes a marketing campaign.

Drive Change. Get behind the wheel of Change. It’s time to change your keys. Change how you get there. Oh I can do this for hours, but I’ll spare you and wait for the Change language to make it into an automotive sales event or product launch.

I’m guessing GM will do it. They did “Keep America Rolling” after 9/11. The clock is ticking who will borrow Obama’s language first?