Sunday, November 16, 2008

Why GM’s “Ripple Effect” PR Video Will Backfire

Why GM’s “Ripple Effect” PR Video Will Backfire

“Despite restructuring, greatly improved quality and fuel efficiency, and investing billions of dollars in the U.S. each year, America’s auto industry is facing imminent collapse.”

These words, printed on a black screen featuring an E85 ethanol tank, is the way a new video, entitled “Ripple Effect” starts out on YouTube.

View it here:

The video, released on Sunday, Nov. 16, 2008, goes on to feature the “ripple effect” a collapse of the “Detroit Three” automakers would have on the U.S. economy, starting with the loss of the three American auto companies - GM, Ford and Chrysler - and reaching down through their suppliers throughout the nation, including those who provide engine parts, car seats, mirrors, tires, and the rest of the vehicle’s accessories.

The companies employ 239,000, and nearly 700,000 rely on them for pensions and two million rely on the auto industry for health insurance, the video notes.

A collapse of the entire industry means a $398.2 billion in losses over three years, the text blares, in the wordless video.

While it may have seemed like a great public relations effort, this "ripple effect" video is going to backfire - big time.

The reason could be that the American people are none too thrilled about the U.S. government bailing out EVERY industry, which seems to be the way things are headed after Treasury Sec. Paulson told Congress last week that he’s used bailout money to buy parts of American companies not on Congresses’ list, or the president’s, when they authorized the “emergency” bailout last month.

But more to the point, it’s because GM has failed SPECTACULARLY to produce results, when they knew times were changing.

“Despite restructuring, greatly improved quality and fuel efficiency…” Really? What company did this, exactly? Surely not GM. Just whom do they think they’re fooling?

And why do they think public relations can come to their aid, when they have done little to solve the problem?

GM has failed to produce a large fleet of fuel-efficient cars for the past decade, knowing that a time of reckoning was coming for the gas hog SUVs they’ve been producing by the hundreds of thousands, yet they continued on doing just that, until this very year.

Meantime, they are pouring millions in to advertising eco-friendly and laudable cars that are NOT CURRENTLY SELLING, but are portraying as if they had already been put on the market. The all-electric Chevy Volt, and entirely hypothetical hydrogen cars, are being touted in print and broadcast ads as if they already exist, or soon will. The fact is, they don’t, and likely won’t. Their electric car of the 1990s was produced, but one car was the full run of that model.

This game continues to be played by GM today.

Two years ago, they built up anticipation that we’d get a trio of hot-looking gas-sipper cars (the Trax, Beat and Groove) that are now never slated for the U.S. at all.

The Volt may indeed hit showrooms - eventually. Their CEO has proclaimed that it’s coming in 2010. Or maybe 2011. 2012 for sure. At least before 2015. Whenever. It’s coming, we’re told. Meanwhile, Honda and BMW are both seriously testing hydrogen vehicles - two steps beyond GM, as usual.

Finally, GM has failed, with a couple of exceptions (the European-designed Saturn Aura and the not-that-bad, high quality Chevy Malibu) to respond to the marketplace. They teased us with those gas-sipping "mini" cars, not meant for the US market, and then teased us with the Volt for years, while pushing SUVs onto their long-suffering dealers. Tell us again WHY this mismanaged company doesn’t deserve to go into Chapter 11?

Not to mention the billions that they’re pouring through each month on extremely large salaries for employees that are putting out pure junk.

Their CEO and management team need to be fired, not rewarded, and if we bail them out, THEY MUST be the first to go.

Which brings us back to the video.

It ends with the dire warning: “Collapse is immanent if we do nothing.” And “What will WE do?”

“We” (meaning GM) need to:
1. Clean house in the boardroom and the upper management.
2. Commit to making clean, green and super-energy efficient cars by 2020.
3. In the meantime, like the Saturn Aura, which is a European-made Opel vehicle with different badging, commit bring almost the entire European fleet of Chevys to the U.S., since they are better made, higher quality, more energy efficient, and are at least five years ahead of the U.S. fleet. (This definitely goes for Ford, too. Go look at Ford UK’s Ford Ka, Ford Focus and Ford Mondeo. Beautiful, powerful, well done and extremely popular in the UK.)
4. Adopt a steep learning curve when it comes to quality. The current lineup of cars, with some exceptions note above, suck. Period.
5. Kill the SUV. Really. It’s over. It was over five years ago. Didn’t you get the memo?
6. Hate to say it, but tell the Unions they must accept lower wages and benefits. Salaries in the low $140,000 range are not acceptable for car assemblers. Sorry. That’s not anywhere near what BMW is paying to build cars in South Carolina or other companies are paying throughout the U.S. It’s simply not a competitive wage.

GM (as well as Ford and Chrysler) needs to also stop throwing PR at the situation, and adopt an action plan, the one above, that restores confidence in the industry.

Public Relations only works when it’s backed up with positive actions. This video is the cry of an addict who refuses to go into rehab.

We should not enable GM any longer.

Stephen Abbott is a Manchester, New Hampshire public relations consultant. His Website can be found at

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