Chrysler releases $6m ad while requesting more taxpayer dollars 

You may have noticed that Chrysler released the longest ad in Super Bowl history on Sunday night, featuring the new Chrysler 200 driven by Detroit native rap star Eminem, an ad that CEO Sergio Marchionne says cost less than $9 million. But given that the company's CEO also announced this past week that is seeking a "better deal" on government loans, it is likely that this ad had more to do with getting political support than selling cars. Besides, is spending millions on a Super Bowl ad appropriate for a company that received a taxpayer bailout to recover from a bankruptcy? 

Maybe the ad wasn't an appeal to car buyers, but rather politicians. According to the Detroit News, Chrysler is seeking a better deal on its bailout:

"I am paying shyster rates," Marchionne said, noting that Chrysler had no choice in 2009 but to pay the high interest rates the government set as part of its $15 billion Chrysler bailout. "We had no choice… I am going to pay the shyster loans."

He called the loans "a thorn in my side."

Chrysler's also in talks with banks to refinance its debt and plans to have an "agreement in principle" by end of March, he said.

Marchionne spoke at an auto industry conference sponsored by JD Power at a hotel here ahead of the National Automobile Dealers Association three-day convention. He said he is hopeful that the company can win an agreement in principle for $3 billion in low-cost Energy Department retooling loan — a move that is necessary for Chrysler to win private financing, Marchionne said.

That's right: Chrysler took $15 billion from taxpayers, to which it wasn't entitled, and at an industry convention its CEO calls taxpayers a word that is defined as "someone who acts in a disreputable, unethical, or unscrupulous way, especially in the practice of law, politics and used car sales." But then it turns to America to say that because Detroit has been "through hell and back" it has endured the "hottest fires which makes the hardest steel," and that the reason people don't know that is because newspaper reporters "don't know what [people in Detroit] are capable of."

A few things about that.

One: Chrysler didn't go through the hottest fires. Unless, of course, "hottest fires" means "skipping bankruptcy" and asking for a handout to protect union pensions, which it got. And when Fiat was able to take control of Chrysler, it was because of a heavily politicized deal facilitated by the president's auto task force. It even got $6.6 billion in exit financing by Uncle Sam. Most failing businesses have trouble finding buyers. Not Chrysler. 

Two: Detroit may have been through hell, but it certainly hasn't come back. Budget numbers still show Detroit's books in the red, despite Mayor Dave Bing's best efforts to rein in spending. And Pew reveals that Detroit residents spend more for their municipal legislature than any other major city in the U.S.

Three: We know what Detroit is capable of because we saw it in the 1960s. We still see potential, too -- Michigan economist David Littman told The Examiner last year that there was plenty of reason to be optimistic:

"We're not even on the map," Littman notes. But the opportunity is there. "We have bargain basement prices on everything -- from water properties, which are a hallmark of growth, to infrastructure. And this is tied together with a large and progressive highway system. We also have the largest underground gas reserves in the nation."

Chrysler must have found the investment worthwhile, using the opportunity of the new Chrysler model to plug Detroit's tough "know-how." Fox was charging approximately $2.8 to $3 million per 30-second slot.

This ad doesn't reveal how tough and competent Detroit is. It shows how the federal government picks winners and losers. Guess which part the taxpayers play?

About The Author

J.P. Freire

Bio:
J.P. Freire is the associate editor of commentary. Previously he was the managing editor of the American Spectator. Freire was named journalist of the year for 2009 by the Conservative Political Action Conference (CPAC). You can follow him on Twitter here. Besides the Spectator, Freire's work has appeared in... more
Pin It
Favorite

Speaking of...

Latest in Nation

Comments

Subscribe to this thread:

Comments are closed.

Videos

Related to Nation

© 2014 The San Francisco Examiner

Website powered by Foundation