Snafu at GM

by Tim Mosso | 4/13/05 5:00am

Last Thursday, General Motors announced that it would pull its advertising from The Los Angeles Times. Under fire from shocked investors, angry customers and the auto media, GM has announced its commitment to solving its problems at the root -- by attacking the press.

In public statements about its ad withdrawal, GM cited "factual errors and misrepresentations" in the Times coverage, but the Detroit company didn't actually cite any specifics. The carmaker issued this veiled threat to potentially critical business analysts and road test writers: "we recognize and support the news media's freedom to report and editorialize as they see fit. Likewise, GM and its retailers are free to spend our advertising dollars where we see fit."

Now, every word of this corporate hissy fit is true, in a technical sense, but the fact remains that GM is trying to bully the media for telling the truth. In a nation built on the twin pillars of privilege and responsibility, GM is defining itself as a self-serving, irresponsible corporate citizen, and expressing outright contempt for aspects of our society that do not serve GM's bottom line.

The Times' harshest critic of GM, Dan Neil, is believed to have precipitated GM's twenty-million-dollar pullout with a harsh attack on GM North America Chairman Robert "Bob" Lutz and GM Chairman and CEO Rick Wagoner. Neil, a Pulitzer prizewinning auto journalist, also attacked Pontiac's G6 sedan as a representative of the inconsistent GM design process.

On just about every count, Neil was correct. The G6, better known as the "everybody gets a car" from Oprah, is not a class-leading product. At the time of the Oprah bonanza, the G6 wasn't even available in dealers -- publicity wasted. Neil correctly chided GM for completely ignoring the potential of hybrid cars, which have given Honda and Toyota huge leads in new automotive technology. GM's recent announcement that it is betting its future on a new generation of full size SUVs was like Noah deciding to build a bomb shelter instead of an ark.

GM's recent fortunes have included profit warnings, media flaps and a colossally-embarrassing "Italian Job" that involved paying $2 billion to avoid a forced purchase of Fiat. Its cars themselves are rarely class leaders. Failures like the Pontiac Aztek, Saturn Ion and countless recalls have demonstrated GM's scattershot record of product development. For every Cadillac success, there is a Pontiac, Saturn or Buick that flops. The cars are scattered over too many divisions that lack clearly defined roles in the modern era. What does Buick stand for? How about Pontiac? Neil asked these questions and GM burned the Times. Even worse, Lutz had admitted the weaknesses of these brands during a meeting in New York, only to be spanked by his superiors (Wagoner). While Lutz recanted, GM's PR counteroffensive went into overdrive.

The current management of GM has expressed outright hostility towards honest media appraisals of the auto giant. Lutz himself has spent the last year on a crusade against "anti-American" journalists. He has gone so far as to create a personal weblog in which he singles out and trashes unfavorable reviews of GM's corporate performance or its products. Lutz, along with Wagoner, is wielding the company's massive advertising budget like a weapon against core American values.

When Neil called for Lutz's head, a line was crossed. In the view of an ineptly managed but still huge company, the press forgot its manners. GM, having squandered a series of early 21st-century gains, is flailing in every direction and exposing the squalid underside of American capitalism.

Private enterprise is a cornerstone of our society, but only free access to information can allow American consumers to be players instead of pawns. GM's naked attempt to force journalists into a public relations role should be a sobering reminder to anyone who doubts the fundamental tension between unfettered profit motive and public interest.

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