Wednesday, November 12, 2008

Asking for your help

So this isn't exactly a post about public relations, but it does show the impact that social media can have for motivating people for action. I've e-mailed this and posted it as a note on Facebook. I hope you'll give some consideration to what I'm asking below.

As many of you know, I work for General Motors (specifically Chevrolet) here in Detroit, and if you've watched or read the news at all lately you know that GM, and the auto industry as a whole is having an extremely challenging time right now. We announced significant losses last week, and made it clear that we are burning through cash at an alarming rate. Last week, the CEOs of GM, Ford and Chrysler met with Congressional leaders regarding the automakers getting $25 billion in loans that would come out of the $700 billion Congress has already approved for the financial sector. While it's true that the government already approved a previous $25 billion in loans for the auto industry recently, that money can only be used for the research and development of more fuel efficient cars and trucks, and nothing more (plus all automakers, including the foreign companies have access to this cash). For GM a portion of that money will go to the development of the Chevy Volt (an electric car), more hybrids and increasing the fuel economy in current internal combustion engines. What we're asking for in this additional $25 billion in loans (not a bailout, we'll pay these back with interest) is a bridge to getting things turned around for the industry.

2010 is going to be a big year for us because that's when we'll be able to defer a huge portion of our healthcare costs over to the United Autoworkers Union. That's also the year the Chevy Volt and other important cars debut for us. So I'm simply asking for your help in contacting your senators and representatives to show your support.

Having traveled all over the country with this job, I know there are some serious hard feelings people have towards GM and the American auto industry in general. I know many people believe the government should just let the market work this out, and if GM and other automakers go under, so be it. I can tell you, however, that if this happened, the entire economy would experience catastrophic changes. You see, it's not just the people who work for these companies that are affected, but all those connected to them in some way: dealers, advertising agencies, public relations agencies, parts suppliers, rental car companies, etc. If peoople in these sectors lose their jobs, then they have less money to spend in the stores in addition to being unable to pay many of their bills (potentially leading to more home foreclosures). Here are a few facts on what would happen if the domestic auto industry collapsed:

  • Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years
  • Personal income in the United States would drop by more than $150.7 billion in the first year
  • The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance
  • Domestic automobile production would more than likely fall to zero – even by international producers, due to supplier bankruptcies
This is not me trying to use some cheap scare tactic to convince you of the need for these loans, these are facts. Furthermore, these numbers come from third-party sources, not from one of the Big 3 automakers.

In summary, I'm asking that you contact your senators and representatives to voice your support of these government loans to the automakers. My team at GM set up a Web site, that addresses many of the rumors surrounding GM right now, as well as a link on how to get in contact with your political leaders.

Maybe you don't drive an American vehicle, and maybe you never will, but we are all impacted by the U.S. auto industry in some way. I hope you'll receive this e-mail in the spirit it's intended, and not as a political issue. Don't hesitate to contact me with any questions or concerns you have about this.

Thursday, November 6, 2008

What impact has the media had on the economy?

The other day as I stood in a long line at Costco to buy my two small items (they really need an express lane there), I was struck by how many people were there despite the current state of the U.S. economy. On a previous trip to Costco just a few days earlier my wife and I were surprised to see how many people were walking out with huge, flat-screen TVs. All of this, plus some discussions I’ve had recently, led me to ponder on what kind of impact the media has had on our economic difficulties of late.

Phrases like “economic turmoil,” “cash burn” and “downturn” seem to make their way into nearly every media story I read, watch or listen to. How many times have you seen a picture of a stock broker with his palm against his forehead and a look of dismay on his face? I’ve now become an international finance expert because I can tell you everyday how well or bad the Asian markets performed overnight. Yet, despite the economic crisis, I still find myself waiting in a long line at Costco.

I’m not naive enough to believe that all is wonderful with our economy, but part of me has to believe that the media has contributed to some of the panic and despair some people have experienced in these hard times. Things are tough for sure, but I have to wonder how much the negative media coverage of the economy has had upon Americans’ psyche. Does this contribute to the panicked sell-offs on Wall Street? If I made my financial decisions based solely on media reports, I’d be hiding my money in my mattress (which I don’t do, so don’t come looking).

Perhaps in the media’s haste to get readers, viewers or listeners, they make their financial reporting as sensational as possible. What if they tempered their coverage of the bad news by reporting on some bright spots in the economy (aside from the booming profits of the oil companies)? I have to believe that this would contribute to increased consumer confidence.

Perhaps I’m way off in my thinking on this one, but if not, what relevance does this hold for us as public relations practitioners? I’ve often questioned how much impact media relations has on our efforts to build relationships with our publics, but I’m beginning to think that broad and repeated coverage of our organizations is influential; for good or for bad.

I’m interested, however, in your thoughts. Has the media contributed to panic and uncertainty in the economy? How much impact does media coverage really have on our publics?

UPDATE: Corey Mull of TMG Strategies just alerted me to a similar post he wrote for their blog a few months ago. It echoes much of what I wrote here, with some additional insight.