Obama Halves Chrysler's Planned Marketing Budget
Advertising Age (Link) - Jean Halliday (May 11, 2009)
Chrysler wanted to spend $134 million in advertising over the nine weeks it's expected to be in bankruptcy -- the U.S. Treasury's auto-industry task force gave it half that.
So if GM, which is wrestling with the possibility of a Chapter 11 filing itself, is wondering how much influence the task force will have over marketing, the answer is: plenty. However, transcripts from the U.S. Bankruptcy Court for Southern District of New York, where the Chrysler case is being heard, proved for the first time that the task force at least understands that advertising is a necessary expense -- even if it doesn't think Chrysler needs $134 million for nine weeks of car ads.
Robert Manzo, executive director of Capstone Advisory Group and a consultant to Chrysler, testified at a May 4 hearing that the task force "believed that it was not feasible to not spend anything on marketing and advertising for fear of eroding the image of the brand," during the company's planned nine weeks in bankruptcy. However, Mr. Manzo also testified that this "hotly discussed" matter resulted in the task force basically slashing in half the amount Chrysler wanted for advertising in the period.
U.S. Bankruptcy Court Judge Arthur Gonzalez then asked the witness: "Idle plants, why market?" referring to Chrysler's shutdown of its factories for nine weeks. "The belief on all sides was that it was essential for Chrysler not to lose its brand image in the marketplace," Mr. Manzo testified. "Advertising and marketing dollars are critical to make sure the right message is out there about Chrysler, what's happening to Chrysler during this interim period and why Chrysler will be a brand going forward that is one that a consumer should continue to look at as one of their purchase opportunities."
Indeed, that's what the automaker is attempting with a national TV campaign from BBDO, Detroit, that's running in prime time on ABC, NBC and Fox to try to calm consumers' fears about the future of its Dodge, Jeep and Chrysler vehicles. The first of two 30-second spots is dubbed "Bright Future," and it refers to Chrysler's reorganization and alliance with Fiat that will build a "meaner and leaner" company for the future. The push is a departure for Chrysler, which earlier this year cut network broadcast out of its budget in favor of more inexpensively priced local TV.
Steven Landry, Chrysler exec VP-sales and marketing, said in a statement that the effort "gives us the opportunity to reinforce that it's business as usual and demonstrate a bright future ahead for Chrysler." That sentiment, however, struck a discordant note with some Ad Age readers after a story on the campaign was published on AdAge.com. "Business as usual? Isn't that what got American car companies in trouble in the first place? Business as usual gave us cars no one wanted to buy, zero innovation, outdated labor practices and a lot of taxpayer money thrown in to keep a sinking ship from going under," commented Jeff from Boston. "How about some unusual business -- like a successful American car company?"
Consideration for Chrysler, Dodge and Jeep vehicles on Edmunds.com did jump 15% in the days after the company filed for bankruptcy April 30, the auto site reported. But news of the filing attracted buyers looking for rock-bottom sticker prices; dealers said customers made "outrageously low offers" for Chrysler vehicles expecting them to take any price, Edmunds said. The consideration boom lasted only five days and is now back to previous levels in spite of Chrysler's new incentive program, which can add up to $6,000 per new vehicle purchased through June 1.
While Chrysler's filing lists BBDO as its second-largest unsecured creditor, owed $58.1 million, one executive close to the matter said the agency will be paid. The executive said the auto task force agreed to Chrysler's plan to give the ad agency "critical supplier" status, which moves it up the payment list. A Chrysler spokeswoman refused to confirm that information; an auto-task-force representative did not respond to calls for comment by press time.
As Chrysler prepares to spend the $67 million the task force approved, GM is cutting back as it tries to slim down to satisfy a June 1 deadline set by the Treasury's auto task force. Few, however, believe GM can avoid following Chrysler into bankruptcy court.
GM reduced ad spending "some" in the first quarter, Chief Financial Officer Ray Young revealed last week in a conference call about the company's $6 billion global loss in the period. He noted in the call that GM is closely following Chrysler's procedures "in case we have to go through it."
Charts GM shared on its investor website during the call show $300 million of the $3.1 billion in spending it cut globally in the first quarter was in advertising. Although the figure was worldwide, most of the slicing likely happened in North America, since the region accounted for nearly half GM's total loss. And the auto giant told Uncle Sam it will trim $800 million from advertising this year.
A GM spokeswoman declined to comment. GM's chief financial officer said talk of bankruptcy has already had "a lot of impact" on the market, although he was unable to quantify how much of GM's first-quarter market-share loss was directly tied to that (GM said its North American share fell to 17.9% from 21.7% a year ago). "We just need to get out of the front page of the newspaper every day, and get this thing behind us," he said.
"A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism."
Thanks to the economic situation brought about through recent history for many reasons, we are seeing greater socioeconomic controls being placed on business as government keeps "bailing" them out. Of course there are always strings attached and it seems now that government is getting more and more involved in the operation of business, people don't seem to recognize the dangers of going down this road. I have only recently begun to look at history more and it seems we are repeating it, only now it has a form more acceptable to the people because it can't really be identified with some of the terms defined above.
For instance, "dictator" is not really applicable in our current stage, but how far are we from that essentially being the fact? Not necessarily one man driving policy but rather one group of leaders doing so with one mind? What is that mind moving towards? From where I'm sitting, it is more centralization under government control reaching into business and banking while continuing its control of international business through trade laws. See here and here and here and here and here...
Another difference is in the suppression of the opposition through terror and censorship. We currently still have freedom of speech and so it can't be said that we are in a Gestapo-style environment. However look at the way terminology is being manipulated and societal norms are being adjusted while indoctrination of these changes is part of the curriculum in public schools. Terror is not currently against oneself, but rather a fear of mankind's affect on the environment and the control that government gains with a population in agreement. And the mainstream media and Hollywood are aligned with this in such a way that the big lies are just repeated to the point of acceptance.
Then there is the last difference from "belligerent nationalism and racism." In today's world while racism is still enflamed by some it has become less of an issue, and rightly so, than in the past. Along with this, nationalism is being vilified in exchange for a more star trekky global consciousness idea where national borders are replaced by a united world of humanity. Of course with the deterioration and elimination of God from the global consciousness in parallel, mankind is increasingly looking to self for salvation, the goal of the new age.
This brings me to a couple of quotes I was reminded of recently and how relevant they are to our situation now and the apparent mentality of much of the world today.
“Two centuries ago, a somewhat obscure Scotsman named Tytler made this profound observation: 'A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.'” | Elmer T. Peterson, Why Democracies Fail: Daily Oklahoman on December 9, 1951 page 12A (more info)
“Paradoxically enough, the release of initiative and enterprise made possible by popular self-government ultimately generates disintegrating forces from within. Again and again after freedom has brought opportunity and some degree of plenty, the competent become selfish, luxury-loving and complacent, the incompetent and the unfortunate grow envious and covetous, and all three groups turn aside from the hard road of freedom to worship the Golden Calf of economic security. The historical cycle seems to be: From bondage to spiritual faith; from spiritual faith to courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to Selfishness to [complacency; complacency to] apathy; from apathy to [fear; from fear to] dependency; and from dependency back to bondage once more.” | Henning Webb Prentis, Jr., In a speech entitled "Industrial Management in a Republic," delivered on March 18, 1943 [entries in brackets added in an October 4, 1946 speech] (more info)
What is the definition quoted at the beginning? Fascism. It seems to me that the bottom line of what fascism represents, governmental control, is well on its way to becoming full blown. I believe these baby-steps are necessary in order to transition a nation built on God-given freedoms into a world directed by men and from there deriving their new "freedom." And according to the Bible, the ultimate outcome of this in the future will be global control of all business and finance such that declining to participate in society's solutions to the developing problems will be exclusion from society and demonization ultimately to the point of death.
In seeing the way the world is going along with what is happening, I can see how ultimately it will almost exclusively be those with faith in the Bible and Yeshua who will reject the new world order that will rise from the ashes and for that be persecuted and viewed as dangerous extremists that must be eliminated to ensure the "peace and security" of this global governance. Already those who study Bible prophecy and point out current events in that vein are being set up in this manner, from the Department of Homeland Security to people like Brian McLaren from within the Christian community itself. By studying this and pointing out what's going on, are we creating self-fulfilling prophecy? Or is it that God knows the end from the beginning and warned us so we wouldn't be caught unawares if we believed His Word? Are you watching?
Remember the former things of old: for I am God, and there is none else; I am God, and there is none like me, Declaring the end from the beginning, and from ancient times the things that are not yet done, saying, My counsel shall stand, and I will do all my pleasure: Calling a ravenous bird from the east, the man that executeth my counsel from a far country: yea, I have spoken it, I will also bring it to pass; I have purposed it, I will also do it. Hearken unto me, ye stouthearted, that are far from righteousness: I bring near my righteousness; it shall not be far off, and my salvation shall not tarry: and I will place salvation in Zion for Israel my glory.
1 Thessalonians 5:1-11
But of the times and the seasons, brethren, ye have no need that I write unto you. For yourselves know perfectly that the day of the Lord so cometh as a thief in the night. For when they shall say, Peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape. But ye, brethren, are not in darkness, that that day should overtake you as a thief. Ye are all the children of light, and the children of the day: we are not of the night, nor of darkness. Therefore let us not sleep, as do others; but let us watch and be sober. For they that sleep sleep in the night; and they that be drunken are drunken in the night. But let us, who are of the day, be sober, putting on the breastplate of faith and love; and for an helmet, the hope of salvation. For God hath not appointed us to wrath, but to obtain salvation by our Lord Jesus Christ, who died for us, that, whether we wake or sleep, we should live together with him. Wherefore comfort yourselves together, and edify one another, even as also ye do.