Consumers in Tampa and Charlotte to Miss Out on Courtesy Car Deals as GM Stops Comping Conventions

Overlooked in the announcements by General Motors and Chrysler that their factories will not be hosting any presidential campaign events such as photo ops or speeches by either the Obama or Romney campaigns is the fact that GM, which for 30 years has supplied both major US political parties’ national conventions with hundreds of new vehicles used as courtesy cars, will not be doing so this year. Frankly though the Big 3 are rather notorious for the casual way in which they provide complimentary cars to high profile celebrities, and though I was familiar with the practice of providing courtesy cars for major sporting events, I had no idea that GM has been doing so in connection with the big political conventions.

With some events, providing courtesy cars seems like a smart marketing move, though with others the car companies don’t seem to getting much value for loaning out millions of dollars worth of vehicles. When Buick or Cadillac sponsors a golf tournament, supplying courtesy cars is part of the deal. For the many decades that Buick underwrote the Buick Open in Flint, after the golf tournament was over, those almost new courtesy cars would be distributed to dealers in the area and ads would run on regional tv and radio about getting great deals on those barely used cars. I presume the same is true for other events as well. I’m sure that after the 2011 Super Bowl in Dallas, when local dealers sold off the pickup trucks and SUVs provided for the big game, they made a point of stressing how those trucks were made in Texas, at GM’s Arlington factory.

When it works, it’s a win win win situation. The events need the cars to shuttle staff and journalists around. Car dealers need demos to sell to folks looking for a bargain and the car company is looking for publicity. That last point is where I see a problem and I think that’s why, in addition to avoiding some of the mud being slung by the politicians, GM is not supplying the conventions this year. There’s just not enough national publicity value derived compared to the cost of loaning the cars. I bet that until you read the previous paragraph or unless you live in the Dallas area, you had no idea GM supplied courtesy vehicles for last year’s Super Bowl. At least with golf tournaments, there’s usually some tie-in with advertising during the event and the manufacturer usually gets to display some cars out on the course, so they end up being on the tourney broadcasts. There’s no comparable exposure available at a political convention. Not supplying the conventions may be part of a reassessment of the way that GM works with courtesy and complimentary cars.

The entire issue of comped cars is problematic and seems to be more about car executives hanging around with jocks and celebrities than it is about promoting product. TTAC has addressed the topic of celebrities getting free cars before, first when GM gave a Cadillac to 2009 Super Bowl MVP Santonio Holmes just as they were getting bailed out by the U.S. government and about to enter bankruptcy, and later when they gave a Corvette in 2010 to then Detroit Tigers pitcher Armando Galarraga as a consolation prize after an umpire’s bad call cost the Bengals‘ hurler a perfect game. You’d be surprised how many famous folks who could afford to pay for them get free cars to drive, and they are not just getting short term loans so the cars can get photographed as the celebs step out onto the red carpet. For example, I bet you didn’t know that celebrity chef Wolfgang Puck has been driving a free Cadillac Escalade for the better part of the past decade. To his credit, Puck plays the game and makes sure to mention the car in interviews and articles but as I said, I bet you didn’t know about it, and if you didn’t know about it, what’s the point of giving a celebrity a free car? Without the attendant publicity, it’s just a perq for someone who doesn’t really need it. Though, with the attendant publicity it becomes obvious that it’s a perq for someone who doesn’t really need it.

The best endorsements, of course, are unsolicited and uncompensated. The fact that Dale Earnhardt Jr. is a paying member of iRacing.com (and does commercials for them for free) is a stronger endorsement than anything he could say about them while on their payroll.

Daniel Howes of the Detroit News points out, in an article about banning political events from car factories for the duration of the campaign, that being identified with either political party is problematic for an American car maker. You just might offend close to 50% of the country, which seems to currently have a polarized electorate. Also, by providing the free use of millions of dollars worth of new cars to either political party, GM runs the risk of appearing to be buying influence. The NFL and the PGA don’t pass legislation. Mostly, though, I think it was a simple ROI based business decision. The courtesy cars provide no real publicity benefit during the conventions, and whatever marketing is done with the courtesy vehicles after the conventions are over will likely only touch consumers in the Charlotte and Tampa areas, not the national market.

Perhaps the people at GM are getting tired of their company’s entanglement in politics. Howes says, “If it were up to CEO Dan Akerson, his management team and GM’s directors, they would move to end government ownership of GM tomorrow — if not sooner. The feds’ stake doesn’t help sell cars and trucks. Nor does it enable the company to easily eschew political entanglements or to close finally a controversial chapter in its history.” From my talks with GM executives, designers, engineers and PR folks, I’d say that sentiment extends well beyond the boardroom. They are unquestionably appreciative of the bailout but they chafe living under a microscope with every product, marketing and business decision second guessed by folks unhappy with the very notion of “Government Motors”.

Howes says that GM personnel are also not exactly thrilled with the fact that Treasury apparently has no exit strategy in place to divest the 26% or so of GM that it owns. That alone, in the opinion of some GM folks, suppresses the price of GM’s stock. Of course being the recipient of that bailout, the people in the RenCen are not going to bite the hand that feeds and go public with their resentments. No, they are more likely to leak that attitude to journalists like Howes, and then take a position that quietly but firmly makes it clear to both political parties that they are tired of being a political football. According to the DetNews, Republican national convention organizers and logistics managers are scrambling to get enough vehicles, renting 450 buses and contracting with car rental companies. In previous years GM provided about 400 courtesy cars and trucks to each convention.