Ford Ad Criticizes Auto Industry Bailout It Cheered For in 2009
Is "Chris the Ford Truck Buyer" the new Joe The Plumber?
In a new TV ad, the automaker shows a real Ford customer facing a fake group of reporters.
When this real customer, Chris, is asked if buying American factored into his decision to buy an F-150, he gives his honest answer to the gaggle of actors playing reporters: "I wasn't going to buy another car from a company that was bailed out by the government," he said. "I was going to buy from a manufacturer that was standing on their own. Win, lose or draw."
According to a film that Ford's customer "Chris" posted on YouTube, his pronouncement in the ad was not scripted. But Ford and its ad agency, Team Detroit, filmed him for some two-and-a-half hours to get the 30-second ad. He says in his post that most of the filming time was about how much he likes his truck and why, not about his position about the bailout.
Ford clearly was a on a mission to use this message in the ad, although they deny it:
"This ad was not timed for political purposes," said Ford spokeswoman Karen Hampton. "This ad features unscripted comments from a real Ford owner, one of many in a series of similar ads."
Team Detroit creative chief Toby Barlow says he doesn't see the ad as being overtly political.
"This ad is one of dozens we have made in the same style, each highlighting a different aspect of the vehicle or the ownership experience," says Barlow. "This is the first one we have done that touches on the fact that some buyers have chosen a Ford at least in part because of how the company got through the last couple of very difficult years with government bailout or ownership."
Ford executives have talked many times about the fact that it got through the economic calamity of 2008 and 2009 without government bailout or government assisted bankruptcy. But this is the first time the company had advertised it so directly, and used its accomplishment to draw such a sharp contrast between the Dearborn, Mich., automakers and General Motors and Chrysler.
The ad also comes smack in the middle of the Republican debates in which candidates for the Republican nomination for president are actively discussing the proper role of government involvement in business. Republicans have by and large been against the government-assisted bankruptcies of GM and Chrysler in 2009, and the loans that preceded those restructuring. It is worth mentioning, though, that former Massachusetts Governor Mitt Romney, who was born in Michigan, has been both against the bailout some times, and seemingly in favor of it other times. Romney's father, George Romney, was Governor of Michigan and was at one time CEO of American Motors Corp.
Ford does not usually enter such an obvious political fray in its marketing. A Ford spokesman did not return phone calls at press time.
Because Ford is making its bailout-free status a point of difference between itself, GM and Chrysler, it is worth revisiting the events of late 2008 and early 2009, and why Ford was able to squeak through the economic crisis without direct government help.
In the Fall of 2006, Ford embarked on a massive debt restructuring, which had the company load up its cash position by an extra $23 billion. The company mortgaged practically everything, including, and infamously, the global value of its Ford blue-oval logo. That cash haul, an advantage over GM and Chrysler when auto sales fell off a cliff, was what insulated Ford from needing bailout loans or a taxpayer assisted bankruptcy.
Ford was bailout cheerleader
But let's not forget that Ford was an unqualified booster of the government's support of GM and Chrysler, as well as the auto parts companies. Ford CEO Alan Mulally told Congress, as well as the media, that GM's and Chrysler's survival was key to keeping the supply chain that Ford relied upon in tact and functioning. Had GM and Chrysler gone down, along with several parts companies, Ford would likely have been next on the dole because its supply chain would have been so severely impacted. It would not have been able to build the cars necessary to take advantage of GM's and Chrysler's woes.
While Ford and CEO Mulally deserve all the credit in the world for saving itself from the need of a bailout, it seems a tad smarmy to use a customer with obvious conservative social and political leanings to criticize GM and Chrysler, and the Obama Administration indirectly, for a policy that Ford and its CEO supported with extraordinary public support.
It seems extra smarmy for a company to join the rainstorm of misinformation and ill-informed debate going on in the U.S., driven by an election cycle, about the economy, tax reform, and the role of government when the financial and housing markets were and to some degree still are, broken.
Paging Joe the Plumber?
In his YouTube video, customer Chris goes on to express his positions without Team Detroit editing him. It is really an expanded version of what the Ford captured in the ad. He even mentions now-bankrupt Solyndra, the solar panel company that received over $535 million in government loans, in his polemic against government "picking winners and losers" by bailing out companies and industries.
Besides the fact that Ford execs took an active role in helping to convince the White House to bailout GM and Chrysler, it might interest Ford's customer Chris to know that Ford takes government loans and loan guarantees all the time. For example, Ford took a $250 million loan guarantee last year from the The Export-Import Bank of the United States, a government agency, that will help finance $3.1 billion in export sales for more than 200,000 Ford vehicles. That announcement was celebrated at Ford's Chicago plant with President Obama present.
Ford did not need that loan guarantee, but it avails itself of such loan guarantees all the time from the U.S. government, as well as foreign governments. Why? Because they are there. It's also safe to say that Ford's lobbyists are active in trying to get such loan guarantee programs created in the first place.
The British government not long ago signed off on a £360m loan guarantee central to Ford's £450m loan from the European Investment Bank to develop next-generation environmentally friendly cars.
The Department of Energy made a $5.9 loan to Ford in 2009 to help it transform factories to produce more fuel efficient vehicles. These loans are at lower rates than Ford would ever get from banks or the credit markets.
There is no question that Ford did well to stay clear of government bailout, and did not specifically take government loans needed to keep its doors open. The fact that Ford had adequate cash to withstand the economic hurricane of 2008 and 2009 is a testament to terrific management led by Alan Mulally.
But dancing on the still one-third government ownership of GM after cheerleading for the government's role in the salvation of the U.S. auto industry in the first place lacks the civilized approach to competition that most have come to expect from Ford.
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