GM recently ran an ad that said something like "we've had a good year, we've won all these awards on our cars, and since we want you to come buy a car we're going to offer you a good deal." Obviously it was a little more nuanced and better presented than that, but that was the general picture.
Wednesday, August 24, 2011
Buy From Us, We Love America
I have to say this was totally underwhelming to me. You know what GM should be telling me if they want to tell me what a good year they had and why I should buy their product? They should be telling me when they are going to be paying back the federal government and how much they paid in federal taxes last year.
Now, of course, GM ran a famous ad in which they claimed they had paid back the loan from the government, which is true, but is inherently deceptive in it's presentation. For you see, the federal government gave $52.4 billion to GM. But, of that amount, only $6.7 billion was considered a loan. So when they say they paid back their loan, they are not really telling us the truth because the federal government still owns $45.7 billion worth of GM stock.
In addition, under a special exemption passed under TARP legislation, GM can write off any future profits (up to $45 billion) against past losses meaning GM won't be paying any federal taxes for a long time. So GM, don't tell me you had a great year until you can tell me that we (us taxpayers) no longer are majority stake holders and you are paying taxes. Until then you haven't had a great year.
In fact, if companies want to get my business, I would love to see an ad sometime that says, "We at company X had a great year last year. Sure we made and sold some great products, but shouldn't that be your minimum expectation? More importantly, we hired Y new employees and paid $Z in federal and state taxes. Now our competitors, company A and B, slashed employee benefits, laid off C employees, only paid $D in federal and state taxes, all while pocketing $E in profits. They clearly don't care about you or understand that we are all in this together. Come shop with us, we are clearly better and we love America."
Now I know that numbers can be manipulated, but most of these things are easily verifiable and you can be sure that when I see that ad I will become their customer, as would most people I know.
Posted by John Nash at 2:08:00 PM