Courtesy the CBS blog Econowatch.
The Obama administration appears to have reminded Chrysler about the cost of accepting government bailouts: with federal funds comes federal control.
A report this week in Advertising Age said that Chrysler wanted to spend $134 million in advertising over the nine-week duration of its bankruptcy. But Mr. Obama’s auto-industry task force sliced that figure in half.
Robert Manzo, executive director of Capstone Advisory Group and a Chrysler consultant, testified at a May 4 hearing in bankruptcy court 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.” But, Ad Age said, the task force overruled the car maker. (Chrysler’s factories will be shuttered for those nine weeks.)
Mr. Obama’s Presidential Task Force on the Auto Industry includes Treasury Secretary Tim Geithner and officials from the Commerce, Transportation, Labor, and Energy departments, plus representatives of the EPA, White House, the Economic Recovery Advisory Board, and the National Economic Council. It includes no professional marketers.
This happened on Thursday; it took me four days to figure out the problem. (Yup, not always swift on the uptake.)
Say what you want about corporations, they don’t generally expend advertising dollars unless they deem it necessary and then only after consultation with marketing experts. It is alarming to watch our federal government override the decision of industry and marketing experts in a clumsy attempt to manage a private corporation through a non-expert committee.
Some have started referring to this country under the new regime “the USSA.”
The USSR was notorious for its industrial “five year plans.”
We know how well those worked out.
So too it will be with Obamanomics.
Same old socialism, just with a new Comrade face at the top.
Monique – for this argument to work you really need to pick a corporation other than GM. Wagoner flew to DC in GM’s $36 million private jet to beg congress for our tax dollars.
And, they are still going bankrupt even after receiving billions in taxpayer dollars. These things happened with the benefit of professional marketers. ‘We the People’ paid the bill.