The Big Three auto cheeses are back on Capitol Hill to take another crack at a bailout. The chief executives of Ford, General Motors and Chrysler failed at their first attempt, each having arrived in Washington, D.C. aboard a private jet. They were told to go figure out how they would use a $25 billion handout to keep the car companies afloat long term.
The auto industry is the No. 1 source of revenue for TV networks and stations. Car ads were pervasive, from sleek manufacturer mini movies to screeching local car dealers wearing tights and capes. But when auto sales fell into the black hole of mortgage foreclosures, the ad category started shrinking.
Automotive fell by 17 percent in spot ads for the second quarter, according to the Television Advertising Bureau. The category dipped to $669 million this year from $806 million last year.
Spot ad spending by General Motors corporate dealers dropped more than 68 percent in 2Q, from $96 million last year compared to less than $31 million this year. Local GM dealers cut back by nearly 25 percent, from $34 million to $26 million.
Ford Motor Co. spent $31 million on spot in 2Q, a 27 percent drop from last year. Chrysler, the No. 1 spot buyer, remained relatively steady at around $85 million.
Subsequent figures are likely to look just as bleak. Auto sales across the nation fell last month to their lowest annual rate in 26 years, Bloomberg reports. The companies’ debt is rated as junk in the bond world.
The Big Three U.S. automakers have collectively upped their request to $34 billion, after having negotiated a round of belt-tightening with the unions GM and Chrysler are also considering pre-arranged bankruptcies, according to wire reports.
The CEOS, who’ve agreed to take a pay cut in’09, actually drove to Washington this time around. GM chief Rick Wagoner drive a Chevy Malibu to Washington, Fox News reports. All three of the CEOs also pledged to work for $1 next year if taxpayers bailed out their companies, a move pioneered by Lee Iacocca nearly 30 years ago when he borrowed $1.5 billion from the government to save Chrysler.
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