#PR

Last week’s announcement that had Chrysler turned a Q1 profit and GM had “repaid” taxpayer loans brought a flurry of political posturing about the success or lack thereof of the auto bailout. With Republicans laying into the auto bailout from several angles, President Obama dedicated his weekly address to a defense of industry assistance. Obama still frames the bailout as an unpleasant necessity, but argues that last week’s news means the chances that taxpayers will recoup their “investment” are improving. And apparently the Treasury agrees. According to the Detroit News, Treasury has revised its estimate of auto bailout losses (not counting GMAC) downwards, from $30.6b to $28b. Progress, sure, but hardly a sign that taxpayers can expect full payback from its state-owned automakers.

For 90 years, the ad agency Campbell-Ewald has been Chevrolet’s go-to source for all-American ad messages, including the “See the USA in your Chevrolet,” “Heartbeat of America,” “Like A Rock” and “American Revolution” campaigns. But despite a track record of household-name campaigns, trouble has been brewing between GM and C-E for months now. In December, GM announced that C-E would focus on developing Silverado pickup ads for the Winter Olympic Games, while car and crossover advertising would migrate over to the French agency Publicis. Today, AdWeek reports that Chevy is terminating its nearly century-old relationship with Campbell-Ewald, and will move its entire Chevrolet business to Publicis. So what does this mean for Chevy’s advertising?

While the White House and most of the media spent the last two days parroting GM’s claim that it “paid back” taxpayers, Senator Chuck Grassley was busy writing a letter to the Secretary of the Treasury [ letter available in PDF here]. The three-page note opens:

Dear Secretary Geithner:

General Motors (GM) yesterday announced that it repaid its TARP loans. I am concerned, however, that this announcement is not what it seems. In fact, it appears to be
nothing more than an elaborate TARP money shuffle.

No surprises there: TTAC has been all over this ruse for months now. Grassley does sum the situation up nicely, stating that “A debt-for-equity swap is not a repayment,” but the most interesting part of his letter is his theory for why GM and the Administration approved the tax-money reshuffle. Thus far, we’ve assumed that PR was the driving concern in this transparent deception. According to Grassley though, there may be another reason…

Taxpayers, your partial refund is in. Now quick, make with the pension bailout and EV subsidies. Oh, and be sure to pick up a new Chevy, Cadillac, Buick or GMC as a “thank you” present for this act of patriotic largess.

Since GM has only recently come out with GAAP-approved financials, determining the company’s value isn’t easy. Still, The Detroit Free Press‘s Tom Walsh reckons The General is worth more than Ford, despite the fact that GM recently fell out of the Fortune 500’s top ten (and below Ford) for the first time in its 100+ years of history. What gives?

GM’s government-installed Chairman/CEO Ed Whitacre hasn’t been wildly popular with Detroit insiders, earning dismissive raspberries from more than a few corners of the industry’s peanut gallery. But now that his reign of executive terror is over, Detroit seems to be learning how to stop worrying and love the former AT&T man. As Whitacre prepares for his first visit to Washington DC as head of GM, the local media and other members of “Team Detroit” are making their peace with Whitacre. So what lies beneath the new united front?

The latest Cruze-hyping video from GM shows the forthcoming compact ripping through a test track, as Vehicle Line Director Chuck Russell waxes eloquent about its engineering and reliability. His point is clear: this new Cruze is a truly global product, in contrast to the America-only Cavalier update that was the Cobalt it replaces. And comparing footage of the Cruze ripping through a slalom to that of a Civic negotiating the same obstacles, one is left with the impression that Russell isn’t just blowing smoke. But then, we knew that already. In his review of the European-spec Cruze, TTAC’s Martin Schwoerer notes:

In contrast to the engine, the Cruze’s ride and handling are perfectly acceptable in the grand scheme of things.

With weeks of recall coverage and with Lexus’s GX460 snagging a rare Consumer Reports “do not buy” warning, you’d think that at least one of CR’s recent “worst-made cars on the road” [via Forbes] would be made by Toyota. But you’d be wrong. Dodge Nitro, Jeep Wrangler, and Ford F-250 join four GM products (Cadillac Escalade, Chevy Aveo, Chevy Colorado and GMC Canyon) as the seven worst cars CR could come up with. And though this hometown sweep for Detroit goes a long way from separating facts from fiction, it’s nowhere near as instructive as the responses from each of the Detroit automakers to the charge of making crap vehicles. Let’s take a look, shall we?

Over a year now, the launch of Buick’s new LaCrosse gave us pause to consider the average age of Buick buyers, and the future of the brand’s demography. At the time, The Detroit New claimed the average age of Buick buyers was 63, a fact that gave the paper cause to celebrate Buick’s new lease on life. And considering that the brand once attracted buyers of an average age of 72, that wasn’t a bad trend at the time. Today’s DetN has a similar story, lauding Buick’s newfound youthful appeal with such quotes as this one from IHS Global Insight’s Aaron Bragman:

They are making definite improvements in the U.S. To kill Buick would have been crazy. It’s one of the most important brands in the Chinese market…. It’s still too soon to really come to a verdict on how Buick is doing in the U.S. But nobody can say those are old person’s cars anymore. Because they aren’t.

But this latest round of Buick-boosting is still based on the old reference point of a 72-year-old average buyer demographic. Compared to a year ago, Buick’s average buyer age appears to have crept back up again, as the Detroit News cites a current average demographic of 65.

The Detroit News has just published a quote that allegedly comes from a January 16 email from Toyota Motor Sales USA group vice president for environmental and public affairs Irv Miller to “company officials in Japan.” Miller’s quote reads:

I hate to break this to you but WE HAVE a tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models. We are not protecting our customers by keeping this quiet. The time to hide on this one is over. We better just hope that they can get NHTSA to work with us in coming with a workable solution that does not put us out of business.

Chrysler is celebrating the Ram’s continued sales slide (relative to last year’s pathetic numbers) by plastering a 100 foot-wide Ram Heavy Duty…

We no longer have the dubious honor of leading this category. We’ve been down that road before, and we know it’s a dead end.

We didn’t listen to GM’s monthly sales call today, but it we had, we would have been even more likely to screw up the headline for Edmund’s incentive report [ed: for which we deeply apologize]. The cognitive dissonance between Susan Docherty’s triumphalist quote and Edmunds’ harsh version of reality left even Automotive News [sub] scratching its head. “GM says it avoided spiff frenzy — but Edmunds numbers beg to differ,” runs the shit-starting headline. Docherty claims that GM pays a mere $2,800 in incentives per vehicle, far short of Edmunds’ chart-topping $3,519 “true cost.” So what gives? Well, GM’s numbers do come from JD Power…

The AP [via canadianbusiness.com] reports that two separate bills to make the Corvette Kentucky’s official state car appear to be dead in the state’s legislature. State Rep. C.B. Embry Jr., R-Morgantown, suggests that the failure of these bills would be perceived as a snub by GM, who builds Corvettes in Bowling Green. Not so, say GM reps.

With or without a bill, the Corvette is an iconic American sports car, and we’re proud to build it in Kentucky. It shouldn’t be perceived as a snub, and we don’t take it as that.

But GM’s downplaying of the news hides the possible cause for what otherwise would be a win-win political proposition.

Poor Sergio Marchionne… the man can’t go anywhere without being interrupted. The Fiat/Chrysler CEO’s speech today in the buildup to the New York Auto Show was interrupted twice, once by the the ubiquitous Teamster protesters, and once by a test of the hotel’s fire alarm system. But then, maybe people would let him speak if he had more to offer than the same lukewarm assurances that everything is going marvelously in Chrysler-land. The Detroit News summarizes his speech by saying Marchionne believes Chrysler will sell the 1.1m vehicles in needs to break even this year, and that it will do so without getting pulled into an incentive war.Which would be hard to do anyway, considering Chrysler spends more on incentives at “normal” levels than any of its competitors.

The “First Drive” is one of the perennial stumbling blocks of automotive journalism. In return for exclusive access to the latest, most-hyped automobiles that everyone wants to get their hands on, outlets like Edmunds Inside Line are asked to swath their “First Drive” write-up in the most glowing terms possible. Or, as we’ve put it before, the price of an exclusive story is a straight face. Unfortunately the results of this kind of compromise are difficult to read with straight face. We’ve seen no better example of this than I nside Line’s recent “First Drive” of the Honda CR-Z, which yielded such unfortunate lines as:

The CR-Z is like a Tesla Roadster, but without the $109,000 price tag.

You know, besides having a different powertrain driving different wheels, a huge performance disparity, and, well, everything else.