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Obama cuts Chrysler advertising budget in half

May 12, 2009

Chrysler wanted to spend $134 million in advertising over the nine weeks it’s in bankruptcy, however the Obama auto-industry task force gave it only half that. This is to be expected, as we have reported earlier that Chrysler owes Ad Agency BBDO $58,000,000. Omnicom Group is listed as it’s second largest creditor…. See this is our problem now, as it was last month when we published this story.

It’s worth noting, when your second largest creditor is your ad agency, exactly what was Chrysler spending their money on… seriously… like this company spent everything they had on advertising… and nothing on R&D …. no wonder they are where they are… in bankruptcy.

The Federal Government viewed at least half of Chrysler’s advertising budget as a waste of money, hence why it denied it… and honestly despite being in the advertising industry.. it’s hard to validate the entire sum in light of the cash crunch and the fact it is in bankruptcy.

The problem is people, when you are on government dollars, you are going to have to expect government results…. and the fact is that government feels that advertising isn’t a priority, payroll is.

You think this is bad, wait until the banks that have taken TARP money want to review their advertising budgets… because you are smoking crack if you think this is the last time this will happen.

Enjoy the new reality.

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Written by TheFounder · Filed Under Advertising Agency News 


Comments

  • You don't cut advertising! Obama's budget is failure by design. Why?
  • Don Douglas
    What happened to the U.S. Constitution? The Government is FORBIDDEN to control/run private business.
  • Frank
    "The Federal Government viewed at least half of Chrysler’s advertising budget as a waste of money"

    Advertising seemed to be very important to him during the campaign... More hypocrisy.
  • Joseph
    My oh my...we are full of republic...s on this site, i guess.
    Chrysler has spent billions of dollars in advertising during the last 20 years and it still went bankrupt. And now it expected to spend $134 Million in 9 weeks, FOR WHAT???? The Gov't has given them and that dumb agency of theirs a fucking dose of reality as you all should get.
    Frank, Don Douglas and Foxwood, you guys are so fucking dumb it's no wonder this business is down the tubes.
  • Mike Dwyer
    The article says in part, "when you are on government dollars, you are going to have to expect government results…." God help us. The government runs on perpetual deficits. Is that now the US businessmodel too?
  • Mike Peinsipp
    I have a question...where in the Constitution of the United States of America (that is with a c, not a k) does the president have the right (or one of his people) to dictate what a private company is allowed to spend? Just curious.
  • Point one if the government is funding a bailout it has every right to interfere in the process. As for as the statement that the 'government has no right', the government would have been taken to the Supreme Court by now.
    Ad money spent wisely will only get marginal increases in sales. The company has to do an entire rejig, it has a whole lot of other problems to deal with. If one thinks of the health of the company that is what is most important. A healthy company can yield ad spends later.
  • As much as I think the government wastes money... and has no idea how to run a balanced budget.., I think running ads ads at full steam... when payroll is at stake is unconscionable

    I want Chrysler to cut back on Advertising, Rent, phone system, taxes, dealerships and everything else under the sun...

    Because the other solution is liquidation.

    Everyone has to get it though their skull that Chrysler is NOT the same company it was a year ago... the company is in bankruptcy... and bankruptcy means you have to pay back what you can and stay in business with the very minimal you have left.

    This allows the creditors to get some of their money back... and the company to keep some if it's assets....

    It sucks yes... but it's where we are.
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