By on June 19, 2009

When the Presidential Task Force on Automobiles (PTFOA) fired GM CEO Rick Wagoner, it should have ended any debate whether or not the Obama Administration was in complete control of the soon-to-be-nationalized American automaker. And yet the president and his minions continue to assert that the PTFOA’s ongoing interventions within GM’s administration jibe with their preposterous proclamations about a “hands-off” non-managment, management approach. Although the PTFOA left themselves a supertanker-sized loophole—we’ll only mess with “macro” decisions about GM’s corporate governance—evidence mounts that the 25-member government quango is, as the Brits would say, well in there mate. The latest proof of life arrives via our good friends at Autoline AfterHours. On John McElroy’s vidcast, GM’s VP of sales, service and marketing for North America offered fresh insight into the joys of federal ownership.

Automotive News [AN, sub] provides the summary of Mark LaNeve’s interface with the PTFOA:

He said the government’s auto task force never prescribed an ad budget for GM during the expected 60 to 90 days the company will be in Chapter 11 before the “new GM” exits bankruptcy court. He also said before the task force OK’d GM’s proposed ad budget, it did its “due diligence,” asking the car marketer how much it spent per vehicle on ads. It also sought data on competitive ad spending, such as how much Mercedes-Benz spent vs. GM’s Cadillac brand.

Just in case you’re wondering, the PTFOA authorized Marketing Mark to between $40 and $50 million per month during bankruptcy. A ten million dollar spread? How delegational. Saying that, it’s the same ad spend rate as pre-C11 GM. So how much time and money did the PTFOA spend trying to figure out that the status quo was A-OK?

As for the ads themselves, am I the only one who thinks that the statement “We’re not witnessing the end of the American car” displays the exact same kind of hubris that got GM into this mess in the first place? Apparently, I’m not the only one who thinks the ads suck—I mean, lack the appropriate focus.

LaNeve said he doesn’t like to advertise the corporate brand, but with the flurry of negative news about the company in recent months, the current blitz was designed to address the bankruptcy and reassure customers about GM’s future.

Reading between the lines, I bet this campaign wasn’t even LaNeve’s idea. Maybe it was ultimately sanctioned by the PTFOA. Stranger things are already happening.

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16 Comments on ““Hands Off” PTFOA Micro-Managing GM’s Ad Budget...”


  • avatar
    vww12

    You have the Presidency managing several of the USA’s largest companies.

    This will hurt, folks. Brace yourselves.

  • avatar
    ZoomZoom

    How long is that thing; an hour? I don’t have the time to watch it all right now; maybe won’t even have time this weekend.

    I’ll have to wait for the “Cliff’s Notes” version.

  • avatar
    midelectric

    So a major owner in a bankrupt company exerts the the right to review expenditures and apparently this is a sign of excessive meddling? Like it or not, the taxpayer now owns GM and I’d like the govt. to oversee the company with more rigor than the comatose board ever did.

    As of yet, PTFOA hasn’t monkeyed with development budgets or product planning and if/when that happens it’s certainly worthy of scrutiny but it seems TTAC throws up the outrage flag at anything PTFOA does and it gets kind of tiring. Not everything they do is worth getting red-faced about. Or is there something more to the nebulous “Stranger things are already happening” line. If so, do tell.

  • avatar

    midelectric

    I do not like it (surprise). The feds have no business interfering with GM for one simple reason: they have no business owning GM. Nationalization is a no-no.

    I reject the argument that says well, they’re in there, so they have to get involved. And look what a great job they’re doing! Way-hey!

    If a “soft landing” is the goal, Uncle Sam should just write a big check and leave. Just write it, write if off, and stand back.

    There are just too many ways that Government Motors can screw GM, the U.S. automotive market, Ford, and, of course, us.

    As for the weirdness that’s already going down, well, try “bailout watch” from the drop down in the News menu.

  • avatar
    stevelovescars

    I don’t like the idea of the federal government “running” a large corporation any more than the next guy, but let’s be honest with ourselves for a minute. How can it possibly worse than the way GM was running itself for the past 30 years?

    The company was bankrupt at least 10 years ago (perhaps not in the strict accounting sense, but the downward spiral was clearly sucking them down even then and the trajectory never improved). I left GM in 1999 and can recall the corporate focus on maintaining a 30% market share… then a 28% market share.

    Without this government “interference” the company would have had to liquidate by now. It reminds me of when people bemoaned Ford making Jaguar cars too generic while ignoring that without Ford there would have been no Jaguar at all.

    It pisses me off to no end, as a different but related example, that Chase Bank, who acquired Washington Mutual as a part of the bank bailouts (under the previous administration, I should add) is spending money like CRAZY here in California simply to announce that the WAMU branches are now Chase… as if anyone really gives a flying fig. The money they are spending is as much our tax dollars as the money keeping GM running.. actually much more of our tax dollars and these banks don’t invent, manufacture, or create a single thing.

    Personally, I think some serious oversight of GM’s marketing efficacy is called for. GM “marketing” has been running the same inane advertisements for years with slightly different spins each time and nobody notices any more. They sponsored golf tournaments for Buick if for no other apparent reason than so the execs could shoot a few rounds with Tiger Woods. They sponsor NASCAR and push products (the Monte Carlo, seriously?) that have nothing at all to do with the racing. Need I go on? They threw away millions of dollars, hundreds of millions of dollars, while cheapening the actual products to save $5/car but then requiring thousands in incentives to get people to buy them. And after all this you think the government could make it worse?

  • avatar
    Lokkii

    As of yet, PTFOA hasn’t monkeyed with development budgets or product planning

    As far as you know.

    Yesterday, you’d have said that about GM’s ad budget.

  • avatar
    midelectric

    I did not and still don’t support the bailout but at this point, screaming that you shouldn’t have been shot is not going to help stop the bleeding. What’s done is done and whether we like it or not our collective interest is now ‘how do we make this work’.

    VW, Renault and possibly other large car firms are at least partially state owned, what is their model for how much say the government has in operations?
    I know British Leyland is often referred to as the archetype for what not to do but it’s not the only model, others appear to be working.

    That is an article I’d like to read on TTAC.

  • avatar
    agenthex

    If a “soft landing” is the goal, Uncle Sam should just write a big check and leave. Just write it, write if off, and stand back.

    There are just too many ways that Government Motors can screw GM, the U.S. automotive market, Ford, and, of course, us.

    I’d say just giving way public money to private owners is a pretty good way to get screwed.


    Chase Bank, who acquired Washington Mutual as a part of the bank bailouts (under the previous administration, I should add) is spending money like CRAZY here in California simply to announce that the WAMU branches are now Chase…

    Speaking of which, the banks were an excellent example of massive taxpayer money being given away to private interests.

    That apparently needs to be applauded as the better choice.

  • avatar
    Johnny Canada

    Mark LaNeve’s body language tells me everything I need to know.

  • avatar
    ERP

    +1 Re Body Language. Must be a hole worn into that sock by now. Must be one hell of rash.

  • avatar
    TonyJZX

    i watched the whole thing too in as much as i had the browser minimize and listened to it like a podcast and occasionaly glanced at the video

    i think la neve did the best he could given it’s hard to smile and put a positive spin on any of this

    what he said about the aveo was kinda funny in a sideways swipe

    we like to think of la neve as an ogre from a tarantino movie but i think he does seem a little troubled to say the least and surprising at the end with his son… wasn’t exactly screaming confidence but i’d be full of nervous tics and affectations in his position too

  • avatar
    TaurusGT500

    …What I got from Messers. McElroy, Vines, LaNeve, and his Peteness is that apparently to be qualified to render legitimate criticism these days, thoughtful or otherwise, you must ….

    ..not live on one of the coasts

    ..not live in a flyover state

    …not live south of the Mason-Dixon line

    ..actually not live anywhere outside of Oakland or Wayne Counties

    ..not own a foreign car (meaning one built by a Asian/Euro-headquartered company)

    …not own an American car (one built by a Detroit/Dearborn/Auburn Hills-based company)that you actually paid for or picked up at a real dealership. (Paying for it or going to a dealer means you’re a schmuck and not a player)

    …be a lifelong D3 shooter and not set foot in a real dealer in two decades.

    …be the progeny of a D3 VP who brought home an endless parade of free cars to play with two generations ago.

    …or be PJ O’Rourke with his unique and substantial literary gifts.

    ….as for the rest of us hoi poloi that don’t make the cut … we may watch the train wreck, but please, no “commentatering” on it.

    Uh Stewardess… barf bag needed in Row 3 please!

  • avatar
    Edward Niedermeyer

    midelectric: Renault was privatized in 96 because (per Wikipedia) “It was eventually decided that the company’s state-owned status was detrimental to its growth.”

    Perhaps Bertel can weigh in on the role of Lower Saxony in VW governance, but my impression is that it typically weighs in only as backup for VW’s already-powerful unions. Keeps local shops open, but doesn’t have enough skin in the game to make calls on advertising, product, etc. Again, that’s my admittedly limited understanding.

    TaurusGT500: +1. I was appalled by those comments. Twice. But why listen to sense when you can justify it all away? Because that’s been working out…

  • avatar

    Outstanding commentary TaurausGT500. You nailed it.

  • avatar
    Landcrusher

    As soon as Uncle Sugar writes the check, every decision at the suckling corporation is being monkeyed with. That’s because all the managers know that their decisions MIGHT be reviewed, and their jobs MIGHT be on the line for it. Even if they were being paranoid, it doesn’t matter because there is cause and effect, sure as if the President walked in and started ordering everyone around.

  • avatar
    BDB

    You have the Presidency managing several of the USA’s largest companies.

    http://ken_ashford.typepad.com/.a/6a00d834515b2069e201156fca215c970c-500wi


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