GM: Yes, We Have No Shortage of Inventory
General Motors Corp. wants you to know that despite devastating strikes that have crippled its production, it’s still in business.
The giant auto maker Thursday night launched a national TV ad campaign telling consumers that its 8,500 dealers still have about 600,000 vehicles in stock.
Phil Guarascio, GM vice president and general manager of advertising, said the move is a response to dealer reports of an “alarming” falloff in floor traffic as the strikes persist through July.
“We want to dispel any perceptions that GM is out of vehicles,” he said in an interview.
The ad campaign comes as GM and the United Auto Workers union continued arbitration Thursday to determine if the strikes at two Flint, Mich., parts plants are illegal. The hearings could extend into the weekend.
The strikes by 9,200 UAW members have forced GM to close 27 of 29 assembly plants. They have also led to reduced operations at scores of parts plants and the layoffs of 193,100 workers. The walkouts have reduced GM earnings by about $2 billion, analysts estimate, with losses mounting at a rate of $80 million a day.
GM, which spent $2.2 billion on advertising in 1997, has cut its ad outlays in half since the strikes began in early June. The company is delaying national new-vehicle campaigns and reducing its marketing budget as part of an effort to contain strike-related costs.
GM has only about two-thirds of the vehicles it normally would have this time of year, Guarascio said. Dealers typically stock up on cars in the summer before the fall introduction of new models.
The 600,000-vehicle inventory would be enough to maintain a normal sales pace for several weeks.
Another problem is that supplies of some popular vehicles are sparse. The Chevrolet Suburban and Tahoe sport-utility vehicles are hard to come by, for instance.
Top GM officials earlier predicted a sharp drop in market share for July. Guarascio said there would be some “share deterioration” but that it is unclear how steep it would be.
Some dealers are reporting that showroom traffic is off for all auto brands, not just General Motors. They attribute the slowdown to the expiration of rebates that boosted sales industrywide in the previous three months.
Frank Ursomarso, a multi-brand dealer in Wilmington, Del., said the number of customers visiting his Pontiac showroom fell more than 50% in July. The numbers were also off at his Jaguar and Honda outlets, but not by as much.
“The ad campaign is a good, positive idea,” Ursomarso said. “It will get people back in who thought there were no GM cars to be had.”
The theme of the ad is “Lots of cars. Lots of trucks. Lots of deals.” The spot, created by McCann-Erickson in Troy, Mich., is expected to run for up to 10 days on network and cable television. Guarascio would not reveal the cost of the campaign, but compared it to the cost of rolling out a major motion picture.
Meanwhile, GM is preparing to resume production at two assembly plants closed by the strikes. It said it would restart Corvette production Monday at a Kentucky plant using parts from new suppliers. It also announced plans to resume production of the Suburban and Tahoe at a Mexican truck plant next week.
