Tactful Advertising

Off in the background the TV entertains the cat. But then I heard a new GM Ad: 

America’s biggest automobile company and its dealers want to help you get the loan you need.

It’s General Motor’s Financing That Fits.

Offering access to millions of dollars …

I guess they booked the ad before they started wanting bailout money?

Just saying – it can’t sound right to the average Joe :)


Actually one of their needs for cash right now is to provide support to their dealer network in regard to customer financing. Many dealers simply cannot find anyone willing to finance vehicle purchases, or buy loan instruments implemented with dealership funds. GM unluckily fell into a huge trap when it sold 51% of GMAC to Cerberus. The still-unresolved banking system meltdown caused GMAC to have a very limited secondary market for its loan-agreement instruments, and Cerberus (motivated entirely by Cerberus profit plus risk minimization, not by GMAC’s original goal of strategic GM sales support) responded by shutting off credit to any vehicle purchaser with a credit score below 700…which crippled GM’s dealers.

No conflict should be perceived to exist between GM asking for financing support from the governmental backers of the frozen financial system, and offering to make some of that financing support available to your potential customers so that they can get the vehicle they want. GM can’t make money unless its customers can get financing. The #1 reason GM has cashflow problems is that sales are way down because the banking situation has caused a lot of purchase-postponements and because current potential customers can’t get financing.

JWilly wrote:

What do you mean, actually? You guessed wrong as to which one of us was having a misunderstanding :)

GM To Public (Advert): “Access to Millions of Dollars!”
GM To Congress (via private corporate jet): “We need Billions of Dollars”

If they’d gotten the money, ya don’t think the idiot sector of the public would have been outraged that Rick Wagoner had picked up $12bn from congress and then turned around and “””given away””” GM cars?

It just strikes me as an incredibly bad time to go mentioning “loan” or “dollar amount” or “millions” in any ad by the big 3 :)


Damned if you, damned if you don’t.

Obviously the car companies are wrestling with sales volumes plummeting and the focus groups likely tell them that one, if not the highest on list, concerns that Joe Carbuyer has is his ability to qualify for a car loan.

Joe Carbuyer hears every day for 3 months that the credit market has dried up and even banks aren’t lending to banks. “What chance have I got?”, thinks Joe. “My credit score is pretty good but I got dinged on that snowblower I bought in 2001 and missed payments.”

I’ve seen many commercials from different types of retailers who are trying to assure buyers that credit is still available.

Yes, it may seem like bad timing but at this point the car companies are facing extinction and have to do everything they can to survive.

Bankruptcy is not the end of the world. CRS can attest to that. So it isn’t survival in the sense of staving off extinction. Survival if you happen to work for the big 3.

The big 3 are big, but their impact on the economy is nothing like it was 30 years ago when we last went through this.

This is something that should have happened long ago

Hehe, like I said, I think they probably booked the ad a while ago or I think they’d have chosen different wording for an ad likely to play on CNN between segments about the company asking congress for money.

Also, the news coverage on this is a little confusing: they’re not asking for a hand out of additional money, they’re asking for some of the money being given to banks – to encourage lending, as I understand it – to be ear marked for loans to the car companies. That was how I’ve heard it described at length, but all of the reportage lately is talking about it as though they are asking for their own bailout money. So, which is it?

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