Indignation Comes Standard: Chrysler Thanks Public with Public-Subsidized Thank You Campaign

thankyouamericaChrysler also always boasted the “inspiration comes standard” but but what about the indignation? For many voters, the billions of dollars given to the auto industry is the latest outrage from Washington, which seems intent on bailing out every failed company and bad mortgage. The U.S. auto industry spent decades fighting environmental laws and resisting pressure to build smaller, fuel efficient cars. Now, no one wants to buy their cars and they are receiving a bailout. Chrysler, however, decided that it wanted to thank the American people — so it took out full page ads in the most expensive newspapers in the country. Of course, this is a lot like sending flowers to a loved one with a bill from the florist. After all, as the advertisement says, “Chrysler. Drive = Love.”

Chrysler was overjoyed at the Administration’s $17.4 billion auto industry bailout plan and could not contain itself over its $4 billion cut.
Less of course what it just spent in celebration: A full-page ad in The Wall Street Journal runs between $206,000 and $264,000 while a full-page ad in USA Today runs between $112,000 and $217,000.

In the ads, CEO Bob Nardelli proclaims “On behalf of the 1 million people who depend on Chrysler for their livelihoods, thank you for investing in Chrysler, and America.” Nardelli seems to have a tin ear when it comes to the proprieties and niceties of begging for public hand outs. He was previously criticized for flying a private jet to Washington to demand a hand out on the basis of corporate poverty, here. The move seemed to fulfill the company’s minivan campaign entitled “Make Your House Jealous.” Both Houses were likely jealous of a guy who can fly to Washington in a private jet, get billions, and then celebrate with splashy public-supported thank yous to the public.

It turns out that the company successfully lobbied the White House to drop loan conditions that would prevent it from selling off the company and potentially avoiding any repayment of the loan. “Cerberus officials lobbied the White House last week to prevent the private equity firm from being held responsible for the Chrysler loans if the automaker cannot repay them, according to people with knowledge of the talks who declined to be identified because the discussions were private” Click here.

11 thoughts on “Indignation Comes Standard: Chrysler Thanks Public with Public-Subsidized Thank You Campaign”

  1. I saw this “take no prisoners” piece of art work from an exhibit called: Between the Wars. It was from 1931 and illusions about class were not as they are today. Here’s the write up: “John Heartfild designed the dust jacket for Sinclair’s, This is How One Makes Money.

    For the back flap he converted a staged scene of stock traders into a crowd of worshippers before the golden calf grafted onto an enormous dollar bill. Using “photography as a weapon” Heartfield exposes the functioning of economic and political power.”

  2. waynebro:

    Quit confusing Jason with facts. He still thinks the 700 Billion Dollar Wall Steet bailout benefited Democratic interest groups. Yep lots of Dems in Gieves & Hawkes suits on Wall Street taking people’s money. The Repubs, you know, represent the common guy in his Alice in Wonderland world!

  3. Why don’t you come back AFTER a democrat is sworn in as President.

    Then you can start griping.

    Right now its still your boy fouling things up.

  4. The Bush administration has been slowly digging a hole for the incoming administration by using up emergency funds and borrowing power with China by handing out over a trillion dollars (that are essentially tax payer dollars) to the banks financial institutions like GMAC without requiring that that money be used for lending, which is of course the only reason we taxpayers would be on board with it.

    After all, the only way the economy will return is with a return of accessible lending for big ticket items like cars and homes. Bush is making stipulations like the already struggling auto workers must take a pay cut. Which is ridiculous. They do this as a smoke and mirrors act to deter accusations of just “handing over money” without any stipulations. So, they make stipulations. Just all the wrong ones.

    The only major stipulation we are concerned with is that the majority of the funds be used for lending, both with the banks, mortgage lenders and GMAC. This will help General Motors instantly because that money will be used to by GM cars.

    Same with the lenders. Make the lenders lend the money out and let them keep the interest returns to drive their profit margins and keep them solvent. That in turn will mean people buying and selling homes which means a return of the construction and building industries which means a lot of people returning to work which means a lot more people paying their debts which means lenders will become more stable which means….

    ….and they talk to friends, and so on, and so on, and so on…

  5. Sally,

    I didn’t write that article! This guy knows what he’s talking about!
    I sure hope the same as you.

  6. My goodness Jill….you must be the long-winded type!!!

    I myself am very unsure about all these bailouts. There are good things and bad things about them. Let’s just all hope that things do get better in time and that this near depression does not get any worse

  7. The article below is from US News and World Report. I wouldn’t call it a bastion of flamming liberals. Cerberus is the multiheaded dog guarding the gates to hell. Quite a company.

    There’s one part of this post I think is unfair. “…{this} is the latest outrage from Washington, which seems intent on bailing out every failed company and bad mortgage.” They won’t bail out the mortgages. No, that might help “the little people” and the economy. There weren’t enough bad mortgages to cause this nightmare. Much of what brought all this down was the packaging, repackaging, bundling and further repackaging of mortages until they were vapor, aka, CDOs, blessed by the rating agencies and crooked regulators.

    “More Welfare For Really Rich Guys
    December 30, 2008 08:44 AM ET | Rick Newman | Permanent Link | Print

    Just in case anybody’s keeping track, the government has now appropriated $9 billion in bailout funds to some of the richest folks in America. This would be Cerberus Capital Management, the private equity fund that owns majority stakes in GMAC and Chrysler and whose chairman is John Snow – the last Treasury Secretary before the current one, Henry Paulson.

    Cerberus is a worthy supplicant because it’s flat out of money – hahaha, just kidding! Cerberus actually has plenty of money, courtesy of a secret list of well-heeled investors. And that’s not even counting the personal stash of billionaire Stephen Feinberg, the company’s founder and CEO. No, Cerberus is a worthy supplicant because of the 35 or so companies that it owns, its two auto-related properties are really hurting.

    Now in a normal caplitalst society, Cerberus’s losses on two troubled companies would merely be the cost of doing business, and odds are high that its gains on other investments would offset those losses. Or else Cerberus would go out of business, and be replaced by a more competent group. But here in Bailout Nation, Cerberus gets special treatment.

    Chrsyler, with one of the weakest product lineups in the industry, qualifies for $4 billion in bailout money because it employs 55,000 workers and it would be an inconvenient time for an industrial firm centered in the most depressed part of America to go bankrupt. GMAC gets $5 billion because it’s losing billions on foolish mortgage-related investments that are going bust, and because General Motors, which owns 49 percent of the lender, can’t sell cars if GMAC isn’t there to make loans.

    [See the cars that drove Detroit’s customers away.]

    You might think that Cerberus, whose specialty is structuring multibillion-dollar deals, could come up with $9 billion on its own to salvage these two companies – if Feinberg et. al. thought they were worth the investment, that is. But it turns out that big investing clubs like Cerberus have rules preventing money invested in one fund or company to be cross-invested in another. Anyway, it’s all too complicated for you to understand. The good news is, Cerberus has no rules against accepting sweetheart loans from taxpayers.

    [See why Chrysler will still be running on fumes, even with a bailout.]

    More good news: Paulson’s Treasury Dept., which is adminstering the loans, won’t require Snow or Feinberg to publicly testify or otherwise explain why they need the loans and can’t cover their own losses. Cerberus has already sent Chrsyler CEO Bob Nardelli to testify before Congress, so that his corporate bosses don’t have to. And GMAC doesn’t have to explain its need to taxpayers because none of the other financial firms that have gotten financial aid from Treasury, like Citigroup and AIG, have had to formally explain. Thank goodness. Feinberg in particular is a notorious recluse, averse to even having his picture taken. Making a public plea for help would have made him really uncomfortable.

    [See a proper way to grill a CEO seeking a bailout.]

    Cerberus is getting the $9 billion because Chrysler and GMAC supposedly play an important role in lubricating the broader economy. GMAC is deemed especially vital to you and me. It used to finance about 80 percent of all GM purchases. This fall, on account of its deep losses, GMAC said it would only lend to people with credit scores of 700 or higher, effectively cutting off millions of potential borrowers. GM, in turn, has cited those lending cutbacks as one of the biggest reasons people have stopped buying its cars. And that supposedly is one reason that the entire auto industry is in a tailspin, making a tough recession even worse.

    [See how the feds will govern Chrysler and GM.]

    So you might think that in exchange for $5 billion, Treasury would require GMAC to relax its lending standards and get some money flowing to consumers. But Treasury doesn’t want to tell anybody how to run their business – they just want to fund it. So the terms of the loan don’t make any stipulations about what GMAC must do with the money. Instead, we’re left to hope that billionaire financial-aid recipients will someday share the governmnet’s largesse with the rest of us.”

    A pox upon their houses!

  8. Is Chrysler associated in anyway with AIG? Are those that run the companies related to one another? Or perhaps attended the same college?

    Why didn’t someone from Chrysler just release a statement that said, “Thanks for saving our butts America” ?

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