By on April 27, 2009

Or so says Automotive News [sub] Executive Editor, Edward Lapham, in a brief aside. According to Lapham, Chrysler is ramping up a major ad campaign (a fact that remains unconfirmed by Chrysler) that steals from the $5 billion supplier bailout fund. “Through its ad agencies,” writes Lapham, “Chrysler is lining up major media that are willing to accept a price cut of 2 percent in exchange for assured payment under the federally funded critical-supplier payment plan.” Because Chrysler wanted to see if its post-bailout supplier relations could possibly be worse. Although to be fair, those two percent savings do add up . . . to about 30 pieces of silver.

For Lapham though, the major worry is that this could “cause some hand-wringing among media moguls about the ethical ramifications of cutting their regular prices.” Dude. One Eddy to another, you’re talking about the financial ramifications. Worrying about the ethical ramifications of this move would be a full-time job on its own. From the appropriation of taxpayer money intended for struggling suppliers to “tell Chrysler’s story,” to AN’s decision to not run this story as a news item, this story is crawling with ethical ramifications. But instead of reporting the facts and asking the questions, Lapham is offering a pro-bono suggestion for Chrysler’s campaign tagline: “If you can find a better option, take it”. And since he opened the piece saying, “don’t start the autopsy—I may feel a pulse!” it seems safe to assume that AN has no “ethical” problems with a 2 percent “haircut” on Chrysler ad sales.

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14 Comments on “Wild Ass Rumor Of The Day: Chrysler Using Supplier Aid to Pay for Ads...”


  • avatar

    They’re suppliers.

    They supply a service (advertising) in exchange for compensation.

    Maybe next time, congress will be sure to specify parts suppliers…

  • avatar
    Brian E

    Is there some reason why advertising is more objectionable than all of the other things that Chrysler needs to operate as a company? The problem here is that they’re operating with my money. Advertising, being a part of that operation, isn’t really any more offensive on its own.

  • avatar
    Juniper

    Fact: TTAC receiving bailout bucks via GM and Chrysler ads.
    So What!

  • avatar
    Martin Albright

    Yeah, I guess I have to chime in with a “so what?” as well.

    The bailout money was to help them stay in business. Is advertising not a part of the business? Can a company in a fiercely competitive business stay afloat if they cut back on advertising?

  • avatar
    superbadd75

    As if I didn’t already have enough reason to dislike Chrysler.

  • avatar
    guyincognito

    ‘Wild Ass Rumor Of The Day: Cerberus Using Supplier Aid to Pay for coke, hookers’…there fixed that for you.

  • avatar
    AKM

    Meh. Certainly not worse than the “Thank you America” for bailing us out ads that came out late last year.
    No wonder nobody buys chryslers anymore (aside from the crappy product, of course…)

  • avatar
    Edward Niedermeyer

    This is not Chrysler spending its own bailout money on advertising, just to clear that up. It’s from a bailout intended for vehicle component suppliers. The larger point is that Chrysler is already notorious for its horrible supplier relations, and this story (if true) is a huge slap in the face for these firms it relies on. Go back through our suppliers topic tab to see what I’m talking about. Plastek, anyone?

    If anyone in the auto industry has truly needed a bailout, it’s been the suppliers. Supplier relations have been one of the dirtiest sides of the industry I’ve covered and bankruptcy has been a fact of life for the supply industry for years. Suppliers fought hard for a bailout (particularly in the pages of AN)in December and January, with the OEM Supplier Association leading the way. What they got was less money than they asked for and the OEMs as gatekeepers. Treasury already left the fox in charge of the henhouse, so the re-appropriation of its funds to buy ad space isn’t exactly a surprise.

    Advertising is a legitimate business expense, but its cost should be born by Chrysler’s bailout bucks not stolen from struggling suppliers. As for TTAC, our ad policies have no bearing on our editorial policies, and vise versa.

  • avatar
    jpcavanaugh

    Paying parts suppliers so they can build more cars seems less of a need right now than paying advertising suppliers who can move the huge oversupply of metal that has already been built.

    But does this look like an action of someone who plans to keep building cars?

  • avatar
    yankinwaoz

    I agree, advertising is an integral part of the car biz. So the fact that they are using money to pay for ads is no big deal. What is the difference between a “supplier” and a “vendor”?

    What is not clear is if that money was only supposed to be used for vendors that have Chrysler as a large enough percentage of their revenue that they would fail if Chrysler doesn’t pay their bills.

    I think that was the idea, but perhaps that is not what was written in the agreement. So shame on Congress or whoever was responsible for these sloppy handout terms.

  • avatar

    The Comedian,

    +1

    But then it’s just like the gov’t and gov’t employees to complain when folks outside the gov’t follow the letter of the law instead of the bureaucrats wishes.

    I’m half tempted to move to Israel. Netanyahu has proposed a stimulus package based on tax cuts and improving the business climate,which makes more sense than pouring money at things. Besides, perhaps because their major banks weren’t big players in derivatives like the Euro banks, the Israeli economy has not taken as big of a hit as the US and Europe.

  • avatar
    John Horner

    “I’m half tempted to move to Israel. Netanyahu has proposed a stimulus package based on tax cuts and improving the business climate,which makes more sense than pouring money at things.”

    …. where you can be one of the US’ welfare recipients. The US has consistently given Israel $2.5 – $3B per year in direct aid, not to mention the value of the US’ military protection of Israel. The US has also co-signed countless billions of dollars worth of commercial loan to Israel. ” … $600 million in housing loan guarantees, $5.5 billion in military debt reduction loan guarantees, $9.2 billion in Soviet Jew resettlement loan guarantees, and $9 billion in economic recovery loan guarantees … ”

    http://assets.opencrs.com/rpts/RL33222_20080102.pdf

    If Israel can afford tax cuts for its businesses, then I don’t think they need cash from Uncle Sam anymore.

  • avatar

    Intel certainly ran a heavy TV schedule promoting the PC in the 90’s.

  • avatar
    BDB

    “I’m half tempted to move to Israel. Netanyahu has proposed a stimulus package based on tax cuts and improving the business climate,”

    Tax cuts for the wealthy and favoring of big business. Gee, when was the last time anybody tried that?

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