April 8, 2009
“Defeatist in Chief” or “Salesman in Chief?” What’s it going to be, Mr. President?
By Peter M. De Lorenzo
Detroit. It’s clear now that President Obama’s speech to the nation last week about the dire situation facing this country’s automobile industry was meant to send a very strong message to General Motors' bondholders to come to the table and be ready to get serious about how much of a whacking they were going to take in order to reach a settlement that would help ensure the company’s viability. The President used the word “bankruptcy” to make his point loud and clear.
Since the president’s speech, Fritz Henderson, GM’s newly-minted CEO, has been highly visible on the news-talk circuit, flaunting the “B” word at every opportunity - as in all parties should come to the table and be prepared to make a deal, or else face the consequences - seconding the President.
Unfortunately, every time President Obama or one of his hand-picked team of auto “experts” mentions the word bankruptcy, GM’s sales erosion continues and more of its dealers are pushed to the brink of extinction. Traffic has slowed dramatically at GM stores over the last three months since the pundits came out of the woodwork (after the hearings in Washington, D.C.) touting the “B” word as a safe and sane option for GM, and the media cacophony in favor of the idea has only grown in intensity since.
Now that the President and his Auto Task Force have touted the concept of bankruptcy for GM as an idea not only worth considering, but one that actually has myriad merits, it has framed the discussion and skewed the attitude of the entire country against the company. And Fritz Henderson’s embracing of the word as a talking point - to show that he’s aligned with the President’s thinking on the subject – hasn’t really helped, either. After all, if the new CEO at GM is talking about bankruptcy as a viably acceptable alternative scenario, then it must have a chance of actually unfolding that way, right?
The problem is that just the hint of the “B” word and the media’s unrelenting obsession with it has tainted the American consumer’s already extremely negative perceptions toward American cars, especially GM. And not just the “damaged” or expendable brands like Saturn, Hummer and Saab, either. No, GM’s entire product lineup, including some of the best and most competitive products on the market today - exactly the kinds of products GM needs to succeed - has been tainted by the talk of bankruptcy.
People who have been arguing vehemently all along that bankruptcy is the best scenario for GM and that it would have no effect on consumer attitudes toward the company or its products have been proven emphatically wrong over the last few months, as GM’s sales continue to tank. When the American consumer hears the constant din of “bankruptcy” talk in the media and from the President’s own Auto Task Force, why wouldn’t the idea begin to sink in? And why wouldn’t sales continue to erode at an alarming rate? And why wouldn’t the American consumer begin to wonder about spending money with GM, or at least wait for the fire-sale deals that are sure to be just around the corner if they just hold on long enough?
Some would argue that our Supreme Green Leader’s “vision” for a newly sanitized and streamlined American auto industry, one that would only build “acceptable” products - of course whether American consumers would find them acceptable or not is another notion entirely (see this week's "On The Table") - is behind this administration’s headlong rush into bankruptcy for GM. That the President would then get his wish to create a Shiny Happy Auto Industry churning out Shiny Happy Green-tinged Smiley Cars that the American public would have absolutely zero interest in is certainly one scenario that has crossed more than a few observers’ minds (mine included).
I hate to break it to the President, our touchy-feely friends out in California and the anti-car, anti-Detroit “intelligentsia” in the national media, but short of a national energy policy - a concept that Washington has been resolutely unable to embrace for decades - which would set gasoline pump prices at a higher plateau in order to gradually wean American drivers away from high-consumption transportation choices, then Americans don’t buy Shiny Happy Green-tinged Smiley cars. Instead, they buy cars and trucks that, remarkably enough, fit their needs as they see it. And there’s no amount of cajoling and arm twisting from Washington, or Sacramento, or from the New York Times that is going to change that.
The problem with the President’s idea for a new “green” American automobile industry is that it his view is woefully short on reality (big surprise) because he and his esteemed minions are talking about an auto future that is a half a decade down the road or more, at best. And when, how and if he gets this country to the Emerald Green City at the end of the Yellow Brick Road, he will leave a legacy of bankruptcies, regional depressions, and a devastated industrial heartland in his wake because of his naiveté and his steadfast refusal to wallow in the facts long enough to understand what’s actually achievable, as opposed to what’s on a wish list.
The more immediate problem for President Obama and the one that he and his group-hugging, corporate-law-bending, reality-flaunting acolytes should be concerning themselves with? If Americans don’t start buying cars in the very near future there won’t be an American auto industry to recreate, no matter how wonderfully amazing his emerald green-colored glasses are.
If the President wants to do this industry and America’s industrial heartland a huge favor, he should suspend his defeatist, “bankruptcy will make it all better” plan for the imminent destruction and fanciful rebirth from the ashes of a business that he and his followers know absolutely nothing about, and instead figure out a way he can actually help an industry that desperately needs it.
He can continue his negative, “Defeatist in Chief” posture, or he can be truly productive and become the “Salesman in Chief” while touting America’s competitive products every chance he gets.
Rather than giving American consumers more reasons to walk away from Detroit and the domestic automobile industry, he should be giving American consumers concrete reasons to buy, right now.
It would be a start at least, and it would certainly be more productive than having to listen to yet another reason why bankruptcy is the only solution for this mess.
What’s it going to be, Mr. President?
See another live episode of "Autoline After Hours" hosted by Autoline Detroit's John McElroy, with Peter De Lorenzo and auto industry PR veteran Jason Vines this Thursday evening, April 16, at 7:00PM EDT at www.autolinedetroit.tv. You can chat with us "live" too. Again, that's "Autoline After Hours"this Thursday evening, April 16, at 7:00PM EDT at www.autolinedetroit.tv.
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