The CEO takes out a fullpage ad in the Wall Street Journal today to thank the American Public for “investing” in Chrysler.
Lets see, is there anything more idiotic than spending more than 100k dollars on a full page ad “thanks for letting me waste your money ” ad ? Does it make it worse that its a business publication where the readers might just recognize the stupidity of wasting money on ad dollars that doesn’t even try to sell the product ? How does it make the next unemployed Chrysler worker feel that their entire year’s salary just went for a single, ridiculous ad ?
Just one more example of how poorly run the car companies are. Note to the Big 3, spend money to make money. These types of ads have as much value as a Bernie Madoff account statement.
And while I am on the subject again, one last suggestion for the Big 3. Instead of determining the right cost structure for your company by working backwards from the salaries of hourly employees and how they compare to foreign owned competitors, how about doing what every successful business does ? Figure out what cars consumers want, and how much they need to sell for. Once you can establish the right selling point that will actually encourage people to buy cars, THEN work backwards to the cost structure you need in order to sell cars at that price point.
For those in Detroit who have never operated a lemonade stand, or any other business, the way profits are generated is by making products at a price people want to buy them for, and then producing them, with all costs allocated, for less than you are selling them for. It’s not apparent that this is a principle that Detroit understands.
And while you are at it, when you spend marketing money, spend it to sell cars, not on Bullshit ads that accomplish nothing
You’ve got my tax money. When it comes time to pay back the cash, since it’s not apparent that anyone in government can be trusted to do the right thing, Im sending these guys after you:
Update:Here is an image of the ad from the Chrysler website
THank You America
So now the UAW, the French and the US government will try to run Chrysler? What a joke! I have worked in the industry for 30 yrs., one thing the domestic auto companies ALWAYS miss is the root cause of their problems. Without a mindset/paradigm shift from the assembly line to the engineering to the management and executives, Chrysler will FAIL!!!!!!!!!!!!!!!!!!
Start with firing ALL the UAW cad designers…LOSERS!!!!!!!!!!!! Continue by actually caring about the products and not the careers, LOSE the EGO’s, promote based on what you know, not who you know. Chrysler will never learn…they deserve to fail…live by free market die by free market!
Also, monitor your suppliers so they do not rip you off blind. There is a JCI/INOAC-JV that has STOLEN millions of dollars from the domestic automakers by OVERBILLING for tooling. When loyal employees express concerns, they are fired!!!! How can the OEM’s not figure this out, especially when the people running these Tier 1’s are f/n idiots??????????? They all deserve to fail…CYA!!!
Comment by CynicalSkeptic -
Ed Hardy shirts
Comment by hrewj -
My wife and I went to a Chrysler dealer yesterday to turn in out T&C and buy a new 2009 T&C. We told the dealer that we wanted to turn in the vehicle when we walked in the door and went ahead with the negotiations. We finally reached a deal (After four or five trips to the manager) and were ready to sign the papers when I asked about the turn in vehicle, which is 500 miles over the lease miles. The salesperson said that it was getting late and we could bring it in the next day to take care of the turn in. I said that I wanted it all taken care of before I bought a new car and I wanted the dealer to eat the extra miles, which would be $100 (20 cents per mile). The salesperson then said that they had gone as low as they could go on the price and they could just send me a bill for the extra miles. I asked if they were going to let me walk out the door over $100, and they again said that they couldn’t go any lower, so I left without purchasing a new T&C. This is a prime example of the arrogance of the big three, and that included their dealers. My wife and I are not Chrysler employees or family members so the company that we buy a car from doesn’t make a bit of difference to us, we just happen to like the T&C. Now, as a matter of principle, we are going out to but a Nissan Quest today. Happy bankruptcy Chrysler!
Comment by mule -
Pingback: Honda D15 Timing Belt Goldwing Gl 1100 Timing Belt Adjuster Aftermarket Honda 22l Belt Timing Marks | B2600
i think there ful of sh—–t and there thefts and keep calling my wifes job when we wear not behind in payments also we was but pay it to date i think they dont care about no one but there greed selfish sceems i would never buy aother car or suv from them again so now my tax money helps them not me or 15 million person out there weres ower bailout
Comment by james -
Ditto the banks — although Maureen Dowd is calling their spending ads in the NYTimes – their bailout!
Meanwhile, I penned a blog about the Chrysler – FIAT partnership. You really know you’re in deep doo doo when your best option is with the stricken FIAT – Fix It Again Tony…
Francesca Maggi
Comment by fmaggi -
Finally a business executive that thanks us for doing business with their company. What a great iidea! You don’t have to “sell” a specific automobile in a newspaper or magazine ad or TV commercial. There are many people that can afford a Honda Accord or Chrysler Sebring. It may be my next one. This recession or depression will not last forever.
Comment by Adam F. Kohler -
I smell BBDO, Chryslers marketing agency, behind this ad. I am sure BBDO sold Chrysler on the idea. Hey BBDO Detroit has to make money somehow. If Chrysler is dead, so are they. Oh, and Guerrilla Billionaire I think you nailed it with your comment on fraud. This whole international economic mess is exposing all the crooks and frauds not only in the private sector but in Congress. Remember “America has but one true criminal class-Congress!
Comment by Ad Nauseum -
yeah….chryslers going down down down…its boat has sunk
Comment by Alexander Dombroff -
Pingback: What were they thinking!? | Search Engine Optimization Blog - Internet Marketing Blog
Pingback: How To Avert a PR Nightmare with Social Media - Ford vs Chrysler | native
I agree that many people can’t afford a Ford Fusion, Chevy Malibu
or even a Chrysler Sebring. By the same token, they certainly can’t
afford an even more expensive Honda Accord or Toyota Camry. Sorry to
mess up your fantasy website with factual information.
Comment by Dave K -
I absolutely hate it when a person like Mark Cuban uses logic to
determine how new cars should be priced. Why do the Big 3 have to
listen to him when they can continue to produce vehicles that few
want and fewer can afford to buy? Mark, why not let them continue
down the road to perdition; we’re only talking about jobs and
the survival of a major industry in the US. Am I missing something
or do you really care about the future of the US? Mr. Cuban, if you
could control your enthusiasm and keep your butt off the court, more
people might listen to your voice in other areas of endeavor.
Comment by don jax -
How cool is the ‘Better of Dead’ reference to this mess!
Comment by Doug -
Ford’s inability to produce a Top 10 selling sedan is an embarrassment but maybe an opportunity. Oh great one, can you tell me why Ford is encouraging the Gov to keep GM alive?
Comment by BizProf100 -
By the way, do you know who the CEO of Chrysler actually is? John Snow, who is CEO of Cerberus, who
owns 80% of Chrysler. John Snow was Secretary of Treasury just 2 years ago prior to Paulson. Of course
he would get the money, he is best friends with Paulson, Bush, and all the other players! It’s totally
disgusting, but what a club to belong to. And the other 20% of Chrysler is owned by Daimler, a German
company. Just connect the dots, and follow the money. And watch the money leave the U.S. and go to
parts of the world where the real power is, and has been for thousands of years…
http://www.saudilayer.net/vb
http://www.saudilayer.net
Comment by saudilayer -
By the way, do you know who the CEO of Chrysler actually is? John Snow, who is CEO of Cerberus, who
owns 80% of Chrysler. John Snow was Secretary of Treasury just 2 years ago prior to Paulson. Of course
he would get the money, he is best friends with Paulson, Bush, and all the other players! It’s totally
disgusting, but what a club to belong to. And the other 20% of Chrysler is owned by Daimler, a German
company. Just connect the dots, and follow the money. And watch the money leave the U.S. and go to
parts of the world where the real power is, and has been for thousands of years…
Comment by Will Appleton -
And well buttered toast indeed.Dan Quayle,Ex Treasury Secretary John Snow,Stephen Feinberg and the Cheney Bush Regime’s Kellogg Brown and Root boys can even spread some caviar on it if they want….
They can have their Leumi Bank in Israel and oversee their Middle East investments in Dubai.Who says they can’t have their cake and eat it too ¿? And lucky for them they don’t have to recive any medical treatment at Walter Reed only collect the management fees….
http://www.thenewamerican.com/economy/commentary-mainmenu-43/638
GM Bailout a Sop to Cerberus?
Cerberus Capital Management, the global financial behemoth that is one of the world’s richest hedge funds, which has a 51 percent ownership stake in GMAC and near-total ownership of Chrysler Financial. By all indications, Cerberus is flush with funds, yet declined to infuse any of its own cash into its ailing automotive dependents. The fairly obvious inference is that Cerberus — whose board is packed with D.C. insiders like former Vice President Dan Quayle and former Treasury Secretary John Snow — is hoping for taxpayer-sponsored bailouts to enable GMAC and Chrysler Financial to limp along until it can find corporate suitors for the crippled automotive giants.
These facts were not lost on Senator Bob Corker of Tennessee. “Cerberus owns 80% of this company [i.e., Chrysler Financial] and has cash — lots of cash — that they are unwilling to put into this company,” Corker said in December hearings. “It troubles me a little bit knowing that basically all we’re really doing is providing a little capital for y’all to hang around long enough to get married [i.e., merge with a corporate suitor].”
The GMAC bailout, and any future Chrysler Corporation bailout, is looking very much like a cynical handout to well-connected financial interests — a sop to Cerberus, as it were — that stand to lose from the impending automotive debacle, before allowing GM and Chrysler to liquidate anyway.
Comment by Tony Ryals -
Pingback: Chrysler: Bad Advertising. Terrible Money Allocation. Worse Leadership. | JASE Marketing blog
Not sticking up for Chrysler, but if everyone is upset about these ads, than they should also be upset that GM is running ads on TV. After all the ad is not just a thank you, it’s an advertisement to get people to look at Chrysler and buy cars. Maybe no car company that gets bailout money should be allowed to run any ads of any kind. Than no one will think about them and continue to buy cars manufactured by foreign manufactures.
Comment by Anonymous -
Chrysler could have written one letter to the editor and sent it to every newspaper in the
country– for free, and made a bigger impact. This is why all the executives
in the big 3 should have been replaced as a condition of the bailout.
Every penny that’s spent should be scrutinized by someone outside the companies who can
be objective. These companies are so used to doing business a certain way, they need new leaders
in there.
Comment by ohioan -
Mark, why do you choose to use clearly copyrighted material in your
blog posts? While ironically you are a member of an organization (NBA) that,
although idiotic and probably in violation of “fair use”, continues
to use claim copyright to limit the the use of it’s highlights and
descriptions?
How do you suppose FOX would react to your use of it’s materials. Can I put Mav clips on my blog?
Comment by maurice -
More like 200k for this ad. We are fools, and Nardelli is an out of touch, over privileged, ever so mannerly, thank you note writer. Good God what a waste.
Comment by Barbara -
Pingback: PR/Media Week in Review 12-27-2008 | PR Blog News
You got a great point in that Chrysler is still tuned out to reality and the other BIGs are the same.
We can throw all the money in the treasury at them at if they don’t produce cars worth buying then its all wasted effort.
The real thing we faced recently was if we wanted to practically lose our only industrial market that produces real jobs to this credit market crack.
Thanks for sharing the post. I totally missed that ad and what a waste that was.
Check out my news blog if anyone has the time:
http://americapress.wordpress.com
Comment by ericlightborn -
Great post…judging from their performance, these guys have no business running a burrito stand, let alone a multi-billion dollar multi-national.
What a ridiculous waste of what would have otherwise paid for 1-3 employee’s annual salary to do something productive.
Cerberus should be up in arms…
Comment by D. Szot -
Techorino
Maybe it’s time to go drive a Chrysler, GM, Ford, Honda, Toyota or Korean car and make an educated decision before letting Cuban, Barney Frank, Bill O’Reilly or Sean Hannity, me or your mom or dad make the decision for you. Those of us who pay for our own goods or services call this research.
Do that and your educated or at least self informed and have a chance of being pleased with making your own decision. There are many who would rather not do this as it removes responsibility and allows them to later invoke blame against those who “made them do it” Like GM building all those gas guzzling SUVs and making us by them.
1. How would you rate you personal experience with the clapper?
2. Have you ever saved a child drowning in the swimming pool by tossing in a Sham-Wow?
3. Have you even listened to Hannity or Limbaugh and felt compelled to make a hat or worse a hood out of aluminum foil?
4. How many pounds of fat have you lost or lean muscle have you gained on any combination of diets or exercise equipment purchased after midnight.
The point is some are far off base on the reality of the situation. How many of each have you owned and how many miles? Or a better argument would be or you not willing to buy an auto brand based on a $100k ad buy during extenuating circumstances. Or are you willing to buy an auto (mitsu)because it comes with a 300 watt amp and there is a chick driving one home from a rave. Or what if it has Onstar? Or directly supports interface to a $200 Ipod? That is a buying decision. What if the piston rings are made out of crack, then you could just tear down the engine…
Comment by mffl -
http://money.cnn.com/2008/12/22/news/companies/toyota/index.htm
So would it be fair to say if consumers don’t have money retailers and manufactures suffer?
It’s a fantastic fantasy that the failure of our government lies squarely at the feet of the big three. Next will Be Intel and AMD, Retailers etc. No money in the middle class pocket means 95% of consumers don’t consume beyond basic needs ad that is 40% of what we have currently consumed. Who else is failing beside automotive? Retailers, Banks, tech companies, high end clothing. Who is succeeding….Walmart and Amazon.
We gave AIG money and instead of it “trickling down” it trickled into bonuses, a scene replayed time and time again. You will soon also see that you can assemble the best athletes in the world but if forced to choose, struggling consumers will choose food and shelter. A very complicated decision. If an all-star sinks a three and there are no consumers to watch it for $179 or $300 live what does his salary become?
Why should I be compelled to buy a T-shirt at AAC for $40 when I can buy a Chinese knock off for $3? Oh wait it is loyalty to the Mavs, Cuban and the League of attorneys.
Be careful how free of a Market you wish for, you might find that it is actually consumer driven. Like fan appreciation night or tickets for the troops. A losing $ on paper to an accountant but it is what makes us believe in the Mavs and believe in you. Every third commercial on NBA league pass is about NBA cares and non-advertising that actually makes us feel OK about these exorbitant prices that are in fairness not at all your fault. But it is a gesture of good-will and belief in our country. How many tickets were sold because the NBA cares and Chris Paul can pose with a paintbrush in his hand or Dirk reads a book to children or because Terry gives money for every three he hits. All admirable causes I would rather pay 30k for an Dodge than pay $5000 for playoff tickets and see photos of Stackhouse at a topless bar or Jho throwing a birthday celebration after losing a playoff game. You will be sadly disappointed when the quality, safety and supply side deficits hit the foreign makers from lack of the American Competition. Not to mention that congressional favors to lobbyist will be exchanged for pennies on the dollar with pennies coming here to officials and billions going over seas. Already has happened in the south
It is pretty sad when the fans are devastated both emotionally and financially more than the players and you business IMHO is failing and you concern is on everything but the mavs.
You can’t even type on this blog without standard IE or FIrefox font settings without it going off into the trees.
Comment by mffl -
Corporate Welfare and Government Subsidies
Toyota has received billions in federal, state, and local government tax subsidies and incentives including:
* $323.9 million in subsides for the plant in Tupelo from Mississippi taxpayers. [1][2]
* $371 million in subsides for the Georgetown plant from Kentucky taxpayers.[3][4]
* $227.5 million in subsidies and tax incentives for the Tundra plant by Local, Texas, & U.S. taxpayers. [5][6]
* $125 million (Canadian) in subsidies to help cover research, training and infrastructure costs. [7]
* $29 million in subsidies for the Huntsville Engine plant by Alabama taxpayers [8]
Toyota also received subsides of $3,150 per Prius sold in the United States. This amounted to at least $189 million for the 60,000 cars sold.
Comment by Jocko -
Pingback: Links of the Day « Our Politics
Cuban,
I have the upmost respect for you as a MFFL, a sports fan, entrepreneur, philanthropist and especially as a man who has remained humble to his roots. You are virtually the only wealthy man with those qualities and my opinion of you will always be of the highest stock.
However, I respectfully disagree with you on this point. You are a wealthy man and know in the grand scheme of things 100k relative to Chrysler is nothing. We are inundated with commercials trying to sell product. How about the commercial of a Toyota being built from branches and twigs that soon decay back to the ecosystem. How much does that commercial cost? I could save you 100k a day by putting 1 less ounce of spot weld in a vehicle. Would it be fair to say that the CEO traded his salary for that ad? The saying goes it’s easy to beat a man when he’s down. You guys are nitpicking peanuts. I could break down a $ figure for per game what we lost with Nash or Devin Harris in retrospect. I could cite that I can Dallas has sold out every game for x number of years even though the stands are obviously not full and the ticket prices are $. I could even put a non-penalty cost on owner comments against the NBA + to charities. Both a respectable move but when viewed as a pure business decision vs. a class of ownership decision are bad moves, cost players, teams and cities titles. But I wouldn’t because of what you have done what you intent is and what has been lost vs. what has been gained for the entire sport by what you have done. Is a bailout when a foreign automakers plant and land is subsidized by our government?
You do realize that 100k is the cost of 561 MFFL paying for the League Pass so that the instant the game ends the screen goes black. I have never heard Carlisle speak and I have probably missed 6 games in four years. What is your opinion on the salaries of NBA players going to be when they can go overseas, get better quality, better officiating, better salaries and cheaper ticket prices?
Tell me this is the Mavs don’t make the playoffs or bomb again, will Dirk and Carlisle take $1 a year? As a Mavs fan I see a pattern, players come to Dallas and get soft, we have a roster of 15 3 point shooters that used to drive the lane. Tough love starts at home. I could complain that the cost of media coverage and crowd control for a billionaire working at Whataburger ultimately cost me money but there was an important point in that action. As there was in the NY ad
BTW I am a certified mechanic and can build any car from the ground up and happened to notice that the foreign makers have been putting V-8 engines in their imports right before the speculation that hit gas prices so I guess the big three were not forcing us to buy their big engines. Looks like we don’t need to drill here drill now. If you were involved in the auto industry you would know that the majority of Mopar vehicles in the 80s-90s were turbo 4 cylinders. I have 3 in the drive that get 29MPG have 4 doors 4 seats and run under 14 seconds in the 1/4 mile. When the domestic automakers wanted to go small the consumers wanted Escalades and Hummers. I also have a ’74 Roadrunner and a Grand Caravan with a 3.8 V-6 that gets 24 MPG with 140 Miles on it…I changed a belt.
No offense, you do great good when you get in the mix of things but I don’ think you have near the understanding of global industries that you comment on. Can you speculate on the cost of autoparts for foreign cars if the big three fail? You know it’s kind of like computers whether you buy a Dell, HP, E-Machine etc, they have a Seagate, Hitachi, Western Digital, Samsung or Maxtor drive in them. What will the safety standards become by overseas cars? The same as overseas toys and baby formula. If you are against bailouts then you should also be against local subsidies for arenas. You know if people have no money at all and can’t pay the rent or buy a car Mavs tickets might get awfully cheap.
Comment by Jocko -
Pingback: The Enlightened Redneck » Note To Detroit: Do The Opposite
Time to go buy a Chrysler :p lol
Comment by Technorino -
Isn’t Chrysler still under the fine managerial skills of Cerberus Hedge Fund run by ex Secretary of Treasury John Snow,Dan Quayle,Stephen Feinberg and boys from Dick Cheney and Haliburton’s Kellogg Brown and Root who who also did such a fine job of delivering ice to Katrina victims(how much did they get for that?) in New Orlrans and who your soldiers owe such a great debt to for all their fine management of Walter Reed Medical ?
And don’t they also claim to have built Cape Canaveral or Cape Kennedy or whatever you call it ?
And didn’t they get at least 10% of Leumi Bank of Israel that won’t pay Holocaust victims what it owes while cooperating with National Taxpayers Union’s James Dale Davidson(who wrote that brilliant eulogy to Ezra Pound upon his death in 1974) Carlyle’s Frank Carlucci and either Russian Israeli mafia or Mossad(is there a difference?)to run penny stock frauds against Americasns from ? And aren’t they the ones that also own the penny stock money laundering Bawag Bank of Austria that alongwith Refco stole over $240 million from middle class Guatemalans causing some suicides while Jim Rogers got all his money back ? Is that the same Chrysler ‘management’ you’re speaking of ? Oh
yeah they owe GMAC to don’t they ? The Iraq war has been veeery veeeery gooood to those guys,…
Comment by Tony Ryals -
Just another chance to drone on about the ‘American People’. I must
admit I was slighly shocked as he didn’t mention the word ‘freedom’
as well.
Comment by Alex -
There are definitely better avenues for that type of message that are a lot more cost effective. Their PR department really dropped the ball…
Comment by Phil Moldavski -
Pingback: Universe Point CEO Blog
Pingback: Thank you Suckers for “Investing” in Chrysler. Yours, Bob Nardelli | The Blog of Record
The ad is indeed a perfect illustration of why they are going bankrupt. A newborn kitten has better business sense than those guys.
Comment by h -
Mark-A buddy of mine drives a Ferrari, among other vehicles. Someone questioned him in his building why he doesn’t support the American worker. His response: They don’t make the best product. If there was a better, American Ferrari, he would buy it. I drive an Audi, you know why? Because it was one of the best cars I could buy for the price range.
Comment by Mark -
Mark,
Everybody and their brother has said that Detroit isn’t making the cars that people want to buy. Toyota and Honda saw sales fall just as much as the big 3. Toyota lowered sales estimates BUNCHES. I own a Toyota and it has nothing to do with the style or MPG of their cars it is ALL about quality. I owned a GM and it fell apart and I had to fix it on my dime. Ford…same thing. Dodge…same thing. I gave each of them a chance to earn and keep my business. This is about quality. People accept lowered standards of service in: landlines to cell phones, TV to YouTube, CD to mp3, etc. BUT a car leaves you stranded and costs $3000 for a new transmission 5K miles after the warranty runs out. Buy a different make…
Comment by bill ross -
I haven’t driven a car since 1995. My bicycle and public transit take me every-
where I need to go. Since then I have bought maybe $20 worth of gas for the lawn
mower.
Opus
Comment by opusthepoet -
Pingback: Detroit Bailout; Don’t Forget The Demand Side « A Dime a Dozen Small Business, Tech and Talk
It’s amazing to me that people are on here criticizing Mark’s commentary and placing blame for the USauto industry’s failures anywhere other than the US auto industry. GM and Chrysler have made crappy cars for a long time. People don’t want them. They have a justified rep as being less reliable then their foreign counterparts. They have spent countless dollars fighting any sort of environment and fuel regulations. Even they’re marketing is less effective, IMHO. It’s inexcusable – make a quality product for a similar price and American’s will buy it.
Comment by Justin -
excellent post! could not have said it any better.
Comment by Aman -
Pingback: FreshArrival » Blog Archive » Link Post, Part 2.
Mark: excellent find !!! Why the hell are we bailing out a private company anyway.And What about cerberus? seriously , when they can’t find it to be the right thing to do to help chrysler…why are public funds going to a private matter. Oh and PS…I am thinking of becoming a bank because I could use some tarp money too…what a bunch of crap….
Comment by Mary -
If we criticize (rightfully so) the Chrysler CEO
for that full page newspaper ad then what might we
say about Citibank’s spending of $400 million of
taxpayer bailout money for naming rights to a
sports stadium?
Comment by Paul R. Green -
In baseball,
Chrysler would be the Baltimore Orioles,
Toyota would be the Minnesota Twins
In football,
Chrysler would be the Detroit Lions,
Toyota would be the Atlanta Falcons
In basketball,
Chrysler would be the New York Knicks,
Toyota the Syracuse Nationals
Comment by Andy Freeman -
I disagree. I think it was great PR for the company. While thanking
the American public, it is putting its brand out there. It is showing
that it supports American workers and spends the majority of its
money in the US.
It makes people take a second look at Chrysler and perhaps helps people
to think about buying Chrysler products.
I think it was a great move.
Jeanne
Comment by Jeanne Martin -
All i can do is laugh!!
Comment by SHOMO -
Pingback: The Nerve « Moody’s Pen
While I dont like it, I would take that ad over Citigroups naming of
the new Mets stadium for $400 million over 20 years after taking $45
billion in in bailout money.
Comment by Jim K -
Shhhh, Mark! As taxpayers we are not supposed to be that smart! You’re ruining it for the bailout recipients!
Comment by Jesse -
Denotation: “Thank you, America!”
Connotiation: “HA-HA … suckers.”
Comment by OSweet -
Pingback: The Agitator » Blog Archive » Chrysler: Thanks, Suckers.
Detroit understands. Idiots running The Big 3 do not.
Chrysler + GM ╪ Detroit.
Comment by Anonymous -
It just proves the point that you have to give them specific
instructions on how to use the money. These guys validate the
assumption that graduating from business school does not a businessman make.
Comment by Small Business Marketing -
This is one of the funniest things I have read in comments, anywhere:
“The market isn’t the only factor in pricing, supply and demand also contribute.”
I can’t think of a more efficient way to show your economic ignorance.
Way to go, PSC!
Comment by LibertyMark -
Pingback: 2010 Ford Fusion Hybrid: Top Mid-sized Hybrid in the USA | New Car Scoop
this is why i think we should issue court orders for banks to make car loans to everyone, bolster detroit with more car orders than they know what to do with, save the the economy, take the used surplus and ship them to iraq, and take there oil in trade.
Comment by anthony saluto -
It shows on how people have to get in line with what is happening. Give that money to
charity.
Comment by Suits -
I appreciate Scott Monty’s comment above. If Ford sticks to not taking any bailout money, it will mean that Mustang fans like me can rightly chide the Corvette crowd about being welfare queens. Well, 45 year old welfare queens neck deep in their midlife crises.
Comment by BoscoH -
“the way profits are generated is by making products at a price people want to buy them for, and then producing them, with all costs allocated, for less than you are selling them for.”
Sort of – with massive car companies, you need to include the Finance arms – charging dealers monthly fees for purchasing vehicles, having them on the lots, general retail credit. Floor planning.
You can sell them at a loss(one vehicle’s cost vs. sale price to dealership) – and still have the parent company make money (manufacturing arm+finance income), so long as dealerships don’t all flee to local banks. Or, you sell your finance arm for quick cash.
Not the best way to run a business, but the numbers can work out.
Comment by Dave -
I guess its true, any idiot with a computer can write a blog! BTY, how
do you find the time, with all YOUR multi-billion dollar enterprises, to advice the Auto companies? to advise the Auto companies. I guess your well run lemonade stand is quite profitableprofitable!
Comment by BillL -
I personally don’t trust the government here in Canada or the US to
make the right decisions for the public. We will never have a say
in anything and still people will vote anyway thinking they actually
get a say in the how the government is run.
Wake Up People!
Comment by mark -
Right on! I want to see GM and Chrysler spend a lot more time getting
input from American citizens and put more of their R&D projects on
the road, not just in the car shows. When Chrysler got bailed out in
the early 80’s, it was because they fell behind technically and kept
selling old designs that oinked down the gas. Back then, the K-Cars
saved the day for them. In 2008, GM, Ford and Chrysler need to
innovate and stop just toeing the line with their marginal products.
Hummer, Pontiac, Buick, GMC… I won’t miss you!
Comment by Tc -
Pingback: Stream o’ consciousness… | Mike Orren
@ KarenT
I don’t think the point that was being made was that Chrysler should not advertise. Marketing is huge part of running a business… as long as it is an effective ad. Not some non-sensical BS thanking the investors. They don’t need investors at this point, they need customers.
Comment by Anmol Garcha -
Great points. Business is like sports. When things start going to shit it’s time to get back to basics.
The time for bullshit, like a needless full page ad, is over. This is going to be the one of the deciding factors to determine if any company can get through to the other side of the current turmoil: Cut the crap! Get back to common sense practices. There is no need for spin.
Comment by Barker -
How do you know they paid $100,000 for the ad. I’m in the ad business and ad rates are highly negotiated.
The advertising community is one of the industries that would be hit hard if these companies went down.
Thousands of jobs would be lost between ad agencies and media companies. Are these companies now
not to advertise? This is how far reaching this business is.
Comment by KarenT -
Pingback: dispatches from TJICistan » Blog Archive » Mark Cuban attacks the Big Three
I worked for GM in the 60’s and it was one of the poorest run
companies I have ever worked for even then Nepotism was rampant
and the management style was based on who the managers liked. Blaming
this crisis on the union is really not the story. Do you, Mark,
blame the players that you pay 15-20 million a year to? No, these
were management decisions and management should take the fall. The
incredible bullshit about how the world will end in GM and Chrysler
go bankrupt is amazing to me.
Life will go. The strong will survive. The world will not come to
an end because there are no more Buicks.
Comment by MIckeyG -
It’s called willingness-to-pay! Thanks for pointing it out Mark. I can’t understand how these buffoons don’t understand this elementary concept. On a side note, what is your take on Chrysler – a private company – getting public bailout funds?
Comment by Julius Seizure -
Sad
Comment by y8 -
Pingback: Terrible Swift Word » Blog Archive » Cuban on Chrysler
… not to mention that since WE didn’t invest in them (we
invested in the jerkoffs in Washington), all such an ad
does is rub salt in a very fresh wound.
Comment by Brian -
So true, and guaranteed to be ignored. Although the executives likely already know this (I assume)….its not that they don’t know what to do to be successful, its just that its hard. What isn’t hard is getting multi-million dollar annual pay packages, you get them whether you are successful or not. See how it works? But the problem comes when almost the entire corporate structure in America is based on this same concept, eventually it becomes unsustainable and the whole thing collapses on itself. Sigh.
Comment by Trevor -
Sorry, I put the link in incorrectly in my last post (email habits).
http://www.npr.org/templates/story/story.php?storyId=98467648
Comment by lr -
This is actually a fascinating twist to this story:
Automakers’ Woes Blamed On Dealerships
Very sad, but I think it has merit.
Comment by lr -
Is there any corporate CEO more relative to performance than Bob Nardelli? You need to write a post regarding why Nardelli needs to be fired.
Comment by jenkins -
I have to say that it’s a lot of money too. But isn’t some publicity better than no publicity. Although they are in the news already. Maybe they could comeback. Who knows.
Comment by M2Mz -
Mark, stick to running the Mavs. You’ve greatly oversimplified the business of making cars. Beyond the basics of just building the hardware, you also have to deal with the manipulation of currency, which the Japanese have been engaged in for at least the last decade. You have to deal with a closed, protectionist market like Korea –yet Hyundai feels free to play in our backyard. Then you have to deal with a state like California, which arbitrarily decides to establish its own emissions standards, never mind that CO2 is not a pollutant. Let’s not mention how US gov’t policy –or lack thereof– has dictated the kind of cars and trucks we have (CAFE, anyone?).
You, like the US Senate, have just shown how amazingly ignorant you are in this area.
Comment by James -
It’s going to be hard to tell your kids “money doesn’t grow on trees” with a straight face
Comment by Robert Abtahi -
James Kunstler nailed it in his CFN blog today:
“What seems to spook people now is the possibility that everybody in charge of everything is a fraud or a crook.”
Comment by Guerrilla Billionaire™ -
PSC: Is $15 an hour really that unreasonable for unskilled factory work? We’re talking about jobs that are mostly in the south where that kind of wage gives you a fair standard of living.
Comment by Matthew -
Mark, you are the man! Keep on keepin on. And Go Mavs!
Comment by Ryan -
Thing is, the kid never did get his two dollars.
Comment by Michael -
“Note to the Big 3, spend money to make money.”
On the contrary Mark, they did. Since no one is buying cars, Chrysler now “makes” its money from the U.S. Govt (aka the American Taxpayers), so in spending this $100K, the CEO was thanking the “investors” for the $4 billion. (and whatever else they can get in March 2009) Now that’s what I call ROI!
Comment by Anonymous -
Good point. But please refrain from lumping Ford into the “Big 3.” We didn’t take any loan money from the federal government. See http://adage.com/article?article_id=133427
I know you’re a Ford fan, but most of all you’re a fan of innovation and smart business. We’re on that track and we’ll get there.
Scott Monty
Global Digital Communications
Ford Motor Company
Comment by Scott Monty -
Pingback: links for 2008-12-22 | to. wa. - walking on the insight road (and not halfway there).
Right On! Mark Cuban hits it out of the park with his comments. It seems that the Big 3 are still stuck on stupid and can’t see they need to reboot.
Comment by Marco -
Pay back the cash. Ha ha ha ha ha. You make me laugh. Can you believe the idiocy to lend money so a company can go bankrupt?
Comment by Miles Archer -
I hadn’t heard of the ad til you mentioned it above (and kudos to @BrettPohlman on Twitter for sharing this link with me). You’re right, of course, as other commenters indicate.
Full-page ads for any business are a waste of money.
Comment by Ari Herzog -
I have a slightly different from that of Mark.
May I offer an alternative thesis to the U.S. automobile makers problems? I offer that the ENTIRE problem with domestic car production is the distortion of the market created by artificial mileage (not so for emissions) standards.
Every car maker was doing their damnest to provide product that the U.S. buyer desired. It was only after gasoline hit $4.00 per gallon that customers suddenly demand higher fuel efficiency vehicles.
Now that gas is below $1.60 per gallon those Hummers are looking attractive again. If Congress want to distort the market: they should have the guts to add a tax on the price of a gallon of gas such that it is stabilized at $5.00 per gallon.
It would have the benefit of being a prime mover in decreasing demand for large (inefficient automobiles), raise revenues and ensure that every supporting member of Congress was voted out of office during the next election cycle.
Comment by Terry Johnson -
Thank you for this. It made my Facebook status.
It goes with the old idiom “Talk is cheap.”
Oh wait, but it’s not. It cost one hundred thousand dollars!
Comment by jquaglia -
Pingback: Just Go Out of Business - Page 3 - Cincinnati Sports Forums - Reds, Bengals, UC Bearcats and Xavier
some good common sense here. we need more people like you in Detroit!
Comment by sean808080 -
I thought bankruptcy was the best thing that could happen to them because it would have allowed them to cancel all their obligations to the UAW and other unions, many of which are a noose around their neck. http://interacc.typepad.com/synthesis/2008/12/a-gift-horse.html.
As you point out, they’re accepting (not questioning) all their problems and current systems/processes/philosophies and trying to dig out with exactly the same rules and principles that got them into their mess in the first place!
Leadership should be about many things, but one certainly is the capacity to “de-entrench” yourself from all the …crap you face if it makes good business sense. But that takes vision and courage.
Comment by Shafeen Charania -
While on this topic I find it interesting Americans have convinced themselves CEO’s need huge salaries to attract the right person andto motivate them accordingly. Toyota on the other hand don’t pay huge salaries. The CEO gets a multiple of the average worker. Toyota is doing extremely well in comparison and will emerge from this mess as the giant of the industry.
Part of the issue with American workers is the CEO’s don’t share the pain despite the poor performance. Surely a good dtart for these guys would be to move to a Toyota style model. That would be s significant reduction in costs.
Comment by Simon -
I want my 2 dollars.
Comment by David Manley -
“go out of business” so be it? In the dark you are.
The big 3 employ a lot of people. But it is the local dealships and auto mechanics that will be screwed.
Then with the UAW hurting, Toyota in Mississippi will slash their wages to $15/hr because there is no threat of unionization by the workers. Further increasing profits.
Many suppliers will be out of business because their bank line of credits are tied to contracts with the big 3. So the parts supplied to your local dealership/mechanic will be hard to come by.
And these suppliers also supply Toyota/Honda etc.. So their costs are rising.
With less supply of cars, demand rises, which means the foreign co’s prices will rise. Plus, the foreign co’s are hurt by less supply, driving up their costs also contributing to a higher price.
The market isn’t the only factor in pricing, supply and demand also contribute.
Add all that up and the only winners are the foreign owned cars manufs. and the senators who’s pockets are filled with millions of donations from these guys.
That is why the bailout of the big 3 is a sound financial investment.
But Mark states the obvious that an elected official can’t. Don’t be stupid with your money. The US economy is at stake.
Now if only this philosophy was applied to the investment banks and the derivatives market.
Comment by PSC -
100 – 74 = 26 . . . my bad!
(I could get a job in the Big 3 acounting departments, though.)
Comment by Ken Carpenter -
AMEN!!
Maybe the 100k should come out of the year end bonus that I am sure CEO will
justify he “needs/deserves”
Comment by James -
Great point — I thought the same thing over breakfast. Instead of spending money on that ad, Chrysler could apply the $100,000-plus toward feeding some of the children of laid-off employees who are not having breakfast today!
Plus, Nardelli freely admits that “the United States is home to 74% of our employees,” which is CEO speak for “22% of Chrysler employees live elsewhere and probably don’t pay taxes toward the unwarranted bailout.”
If the U.S. car companies — or the 74%-U.S. car companies — go out of business, so be it. Our desire for cars won’t change, and somebody else will step up to meet the demand, hire trained employees, etc.
Comment by Ken Carpenter -
Well said! Although I believe it is the govt stressing the worker salaries.
Comment by Dave T. -
From the Ziegfield Follies in 1946:
Just Pay The Two Dollars:
Comment by danielmcvicar -
Right on! Mark you see through to the obvious. Wonder that we never get this insight from the Media and the Usual Corp guys..
Comment by GrizDave -
This is why I come to the church of Mark Cuban. I couldn’t agree with you more.
I’m sickened that we’ve weakened American innovation by feeding fat cats car makers who can’t make money.
I hope one day the execs at the former Big 3 end up in jail for this fraud.
Comment by mclanea -
More great insight. Wish they’d have listened years ago.
Here’s the best ad yet for the Big 3… (though it’s obviously not real).
Comment by Daniel Holter -