REPORT: Obama administration slashes Chrysler ad budget by 50%
Chrysler is nearly two weeks into its bankruptcy, and the Auburn Hills, Michigan-based automaker is already getting an idea of just how engaged the Obama administration plans to be in the process. Chrysler planned to spend $134 million dollars on advertising during its supposed nine weeks of bankruptcy, but the Auto Task Force has reportedly cut the figure in half. Judge Arthur Gonzalez wasn't even sure 50% spending was necessary, saying "idle plants, why market?" But the Task Force apparently says it recognizes that marketing is necessary during the bankruptcy to prevent the further erosion of the already battered Chrysler brand image.
Chrysler Marketing and Sales Vice President Steven Landry defended the decision to spend on advertising during the bankruptcy saying that the move "gives us the opportunity to reinforce that it's business as usual and demonstrate a bright future ahead for Chrysler." One commenter on Advertising Age took "business as usual" as a bad thing, as that mentality lead to "cars no one wanted to buy, zero innovation, outdated labor practices and a lot of taxpayer money thrown in to keep a sinking ship from going under."
Auto research site Edmunds.com told AdAge that the campaign appeared to be working for the first five days, saying interest on its consumer auto search site jumped by 15%. Interest in Chrysler vehicles dropped back to pre-bankruptcy levels after that, though. One dealer told AdAge that the only added interest appears to be from would-be buyers trying to "low ball" to see if dealers will take next to nothing just to liquify assets.
Chrysler's ad campaign during Chapter 11 consists of two corporate branding spots that touts Chrysler's wares and explains the Fiat situation. The other three spots are product ads for the Jeep Grand Cherokee, Dodge Grand Caravan, and Chrysler Town & Country.
[Source: Advertising Age]
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Reader Comments (Page 1 of 4)
Kitko 10:32AM (5/12/2009)
You used the wrong side of the ad :-) Actually, the better idea would be to replace these cars with Fiats... Panda is about half size of the Jeep :-)
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RHParker720 6:11PM (5/13/2009)
Try to name just one thing the government has ever done domestically that ever worked. Here he is, sounding and acting like he's a car salesman, and what happens, THE VERY FIRST THING HE TRIES TO RUN GOES BANKRUPT!!!
This nation's on a collision course for a disaster; and the fuel gauge is almost to the E. Wake up America, socialism doesn't work!!!
dukeisduke 10:33AM (5/12/2009)
"Is Chrysler still in business? I don't see ads from them anymore."
- consumers
Epic fail!
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Jim 10:36AM (5/12/2009)
"Judge Arthur Gonzalez wasn't even sure 50% spending was necessary, saying "idle plants, why market?""
Uh, 'cos there's still a crapload of cars out there that need to be sold?
How can one become a judge while being that stupid?
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Alex 10:41AM (5/12/2009)
Just further proof that everyone thinks they know the right way to run an auto manufacturer.
BoxerFanatic 10:47AM (5/12/2009)
Further proof that the government thinks it knows better how to run EVERYTHING.
This is damned ridiculous. The government should "NEVER EVER, EVEREVEREVEREVEREVEREVER come by here..." I mean, have this much authority.
Micro-managing how much money does what in their current operating expenses?
Ch.11 proceedings, I get it.. and I can see why they would want to re-structure the company's over-all organization structure, and re-structure outstanding debt. But if the company is supposed to have some semblance of operation during the Ch. 11 proceedings, they need to be allowed to operate.
And a JUDGE is not the CEO, no matter how much he might want to be.
All three branches of government have gone completely off the rails, but the train is still moving at break-neck speed. Over a cliff.
Pip 11:10AM (5/12/2009)
It's not like it can get any more screwed up....
BigWill 11:14AM (5/12/2009)
To ice this, look at the inventory numbers. At the time of filing there were 286,687 units of 2009 models on dealer lots. Better yet, there were 36,370 *2008* models at dealers. And the geeeniuses - Judge G and the PTFOA think Chrysler doesn't need ads or incentives.
I'm not even going to get into the dealer situation which at this point could very well be the final stake to Chrysler's heart.
loonranger 5:21PM (5/13/2009)
Look how dumb you can be and get to be President.........
Actually I don't think he is dumb -- just the most corrupt person I have ever seen.
I truly believe we have a very well planned out conspiracy to destroy the USA
to enslave the working class under a One World Government. It is working and will be so well entrenched that it cannot be reversed.
Jim 6:29PM (5/13/2009)
"Look how dumb you can be and get to be President........."
yeah, and for two terms, no less.
"Actually I don't think he is dumb -- just the most corrupt person I have ever seen."
*sigh* another Faux News drone. Into the bin with ye'.
Julius 10:43AM (5/12/2009)
Hmm... doesn't seem like a good idea to me to be cutting advertising when you're trying to increase sales, but hey, I'm not a Harvard-educated lawyer. Perhaps the Task Force is looking to bury Chrysler, not keep it alive long enough to sell it.
We should see how this pans out, as GM's next. Welcome to the post-American auto age...
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PJ 10:45AM (5/12/2009)
"gives us the opportunity to reinforce that it's business as usual..."
Well, Chrysler, when you're in bankruptcy, it's *not* business as usual.
Rather than this being a Chrysler vs. Obama issue, it seems more to me a Chrysler vs. the-taxpayers-keeping-them-afloat issue. Who wants Chrysler spending $134 million of their money to tell them about products they're not interested in in the first place?
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BoxerFanatic 10:49AM (5/12/2009)
If that is the case, then they should have filed chapter 7, and shut the doors.
Either they are continuing to operate, or they are not. If they are continuing to operate, then they need to be reaching out to what potential customers they can find. If they are not trying to operate, they need to shutter the whole place, not just the ad department.
PJ 11:02AM (5/12/2009)
They're still getting $67 million--of our money, mind--to do just that.
Remember, too, that the only reason the government is involved--and that Chrysler didn't file Ch. 7/11 by this point--is because they ran crying to the previous administration begging for taxpayer money. This mess wasn't the govt's idea.
Yikes 11:44AM (5/12/2009)
When you say "previous administration" are you referring to the democratic controlled house and senate that have been in control of the purse strings since 2006?
PJ 12:12PM (5/12/2009)
Yes, which is still different from "Obama," as many seem to think the bailouts and related proceedings are his personal Iraq.
XGM 12:59PM (5/12/2009)
Not sure how you guys down in the US are, but in my neighborhood of 75 houses or so I can say Chrysler (Dodge especially) is the most common brand. I count 7 Calibers, 5 Caravans, 3 Chargers, 2 Magnums, 2 Rams, 2 Renegades, a Journey and a Viper. Also its interesting that our local dealer has sold almost all the inventory, and all the new cars coming in usually sell off pretty fast.
Frank 1:17PM (5/12/2009)
Pj,
Yes this was BO's idea, he and President Bush talked it over before he took office. BO wants to solve the problem. But if GM/Chrysler are out of business there is nothing for him to solve, no? So it was with Obama's agreement and blessing that GWB authorized the TARP funds for GM/Chrysler.
PJ 2:32PM (5/12/2009)
I very much buy that Bush and Obama "talked it over" in December, but I don't buy that TARP--proposed in September 2008--and the auto bailout--proposed in November--were Obama's "idea," as he was only a presidential candidate (one being criticized for wielding too little influence in government) during the former.
It's a no-win situation for any administration running this thing, really. On one hand, you get hammered for spending billions of taxpayer dollars on the "lost cause" D3, and on the other, you're accused of "killing American business" when you mandate Ch. 11, cut their ad budgets, or don't give them all of the earmarked TARP funding.
Mike 10:51AM (5/12/2009)
Looked at buying a Charger R/T under employee pricing last weekend.. There's none available in Canada with the Road/Track package, and only 5 R/T's in any form at all, with only two of them in Ontario.. and with the plants shut down, the offer will expire before they start up production again..
so much for that plan.
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