Detroit Must Get Back to Selling Vehicles and Not Toothpaste

Bring Back the Car People, They Know the Customer and the Market

While the bean counters are busy at work dismantling General Motors’ and Chrysler’s social and business programs, making them leaner and more profitable, they must not forget that these companies are selling vehicles, not toothpaste.

Selling toothpaste is easy – most people need it, and everyone can afford it. But, the art of selling automobiles is far more complicated. Although most people need them, not everyone can afford them. There’s much more to it than merely building good products and creating awareness of them.

In the last ten years, Detroit arguably moved away from selling cars and shifted to selling brands. Other companies followed their lead, because at the time, Detroit was a leader. Today, too many brand managers at too many companies are myopically focused on brand awareness. A car has to be something more than just a vehicle to look good in while cruising.

As part of the current restructuring, Ford, GM and Chrysler should be bringing back the right car people – executives who understand the hardware and the mindset of real buyers. Car people understand that selling cars today requires more than just creating an impression, or an image. You have to connect with the people making the purchase. You have to understand why they want the car, then convince them they actually need it, and that’s not easy. Therefore, good public relations, community relations, and business relations are equally important.

Buyer’s concerns must be addressed. For example, consumers really care about safety, so promoting good drivers’ education – especially to teens – is essential. Since traditional driver training falls far short of preparing young drivers for the realities of the road, there’s a real opportunity here for auto companies.

And, they want good fuel mileage, so build a car that delivers it, while remembering that the young guy, the doctor and the mom all want a car that tells the world how cool they are. Yes, building a high quality, dependable vehicle is a de facto requirement, but educating consumers about the importance of certified service and maintenance must not be forgotten either.

In this market, a good credit rating is more important than ever, too, so the marketing component should include an initiative to ensure financial literacy. The average consumer knows they are at a disadvantage during the purchase process without knowledge of financial choices and its jargon. Accomplishing all this requires much more that just brand awareness.

Of late, marketers desperate to embellish the image of their wares have been focused more on lifestyle than automotive media. They think associating their product with the glamour that lifestyle media portrays will create a favorable aura for their products. However, consumers are considerably more pragmatic than that.

With all of the information available to today’s consumers, automotive purchases are researched more heavily than ever before. Thus, automotive media is more important than ever. If a car company wants to spread the word of mouth about the quality of its vehicles, it must first convince the opinion leaders, who rely upon automotive media.

Despite the fact that the Detroit Three on average spend twice as much on brand awareness marketing, they have not been able to crack their image problem. What’s worse, after years of misdirected budgets, they’re being forced to slash their spending. More hard information is needed, not just glamorous ads in lifestyle magazines. In fact, Detroit has slashed their magazine advertising to a point that major publishing companies are really feeling the loss of revenue. The internet is now king.

The playing field has changed. With today’s uncertain economy and lack of confidence in American cars, consumers need to be convinced they should buy a car rather than hold onto their old clunker. And they need to be educated about the quality and innovation of a car made in this country.

For this reason, auto companies should stop outsourcing their marketing efforts. By delegating their most important task, they are spending good money on often bad advice. The car people at Chrysler, Ford and GM and should be directing their agencies’ efforts, not the other way around. Automakers can no longer continue marketing to only 75% of the country and expect to be competitive.

Take diversity for example – with few exceptions, most marketing agencies are not ethnically diverse, and this leads to big mistakes. As an example, for a long time, all marketing to Latinos was conducted in Spanish – as if Latino car buyers were crossing the border to buy new vehicles. As a result, over 60 percent of Hispanics (those who are English-dominant) were being ignored, and frankly still are by some automakers.

When the first African-American automotive media company was launched 15 years ago, amazingly, no automaker’s agencies were marketing luxury vehicles to minorities, who buy far more luxury vehicles than the average consumer. And currently, minorities purchase 25 percent of all new vehicles. To get the company off the ground, it didn’t go to the agencies, because they clearly were not recommending diversity initiatives. Instead, it went to the presidents of the auto companies, because they are the visionaries. It didn’t take much to convince them of the common sense of marketing their products specifically to individuals of all races.

Also, their PR managers should distribute more than just product information. They can also spread news about finance, safety, new fuel-saving technologies, service, and maintenance. Additionally, they should increase their targeting of women and minority consumers, who need more information specifically relevant to them. If manufacturers directed their marketing and PR departments to use all the necessary tools to guide the consumer through the buying process (while marketing all its vehicles to all consumers, including women and minorities), more sales would result.

After all, a broader, better informed, more diverse population of consumers would only serve to make the overall pie much larger. By applying all the marketing and PR forces at their disposal, Detroit could entice more credit-worthy consumers to buy new vehicles, and help the others improve their credit. Then, instead of fighting for a share of the current 10 million transactions, there could easily be a pool of 15 million.

Any car company that focuses only on its image in an effort to attract the first sale might win the customer initially but could lose in the long run. To develop a loyal customer, one who will buy a new vehicle every two to three years, constant attention and education are required. Once they are in the fold, you have to work hard to keep them. 

 

Randi Payton

President of On Wheels Media

rpayton@onwheelsinc.com

www.onwheelsinc.com

301-390-0468

Teamwork to keep Detroit Three Afloat is in the National Interest

By Jeff Yip, Asians On Wheels

The Detroit Three need quick government (and, yes, that means us taxpayers) assistance to survive. Economic dominoes — triggered by decades of bad decisions, arrogance and good old-fashioned greed on the part of the usual suspects — have toppled, creating the threatened meltdown.

But don’t write me off as an apologist or cheerleader for U.S. automakers or the United Auto Workers.

President-elect Obama’s mantra has been change and change must happen. The perception that General Motors, Ford and Chrysler build inferior vehicles has to change. The only way to do that is to accept nothing short of excellence. Auto companies, their dealers, consumers and journalists must then get the message out that the Japanese brands aren’t the only ones who have figured out quality and reliability. There’s American iron — Lincoln Town Cars and Chevrolet pickups, to name just two — that run 200,000 miles with decent care and regular oil changes. Manufacturers and their workers must banish the phrase, “good enough.”

Change is under way. In Washington, long-time congressman John Dingell Jr. lost his chairmanship of the powerful House Energy and Commerce Committee to California’s Henry Waxman.

Wall Street and Washington must stop thinking short-term and look beyond the borders of their own districts. Ironically, the American auto industry has finally begun thinking long-term but may not even be around to enjoy the rewards.

About a year ago, during the annual Consumer Electronics Show in Las Vegas, I had dinner with some General Motors executives and engineers who’ve been working hard to get the much-hyped Volt and other energy-efficient vehicles into consumers’ hands. The folks we journalists talked to were not faceless, paycheck-collecting automatons but enthusiastic engineers and managers who pay for fuel and insurance and have children they want to leave a clean environment to,  just like the rest of us. I came away impressed that General Motors had seen the light on quality and saving natural resources.

Instead of being Chrysler’s most visible commitment to going green, the hybrid versions of the 2009 Chrysler Aspen and Dodge Durango may wind up being collector cars after Chrysler was forced to pull the plug on the line mere days after they went on sale. The reason? With truck and SUV sales tanking, Chrysler is closing its Newark, Del. factory at the end of the month.

“Free market” advocates may choke, but government stepping in and having more say might be a good thing. Clearly, the old way – a wall between government and the Detroit automakers — hasn’t resulted in a healthy automotive sector.

If we permit the auto industry to go the way of the American television industry (remember Philco, Magnavox, RCA and Zenith boxes?) by not coming up with an aid package and holding the automakers’ and United Auto Workers’ feet to the fire, taxpayers will still have to pay the price in health care and other social services.

A much greater price could be exacted if the auto industry implodes. The United States — which still represents the land of freedom, innovation and opportunity by immigrants, many of whom wind up contributing to the auto industry  – needs the engineering and manufacturing infrastructure for its very security.

My father served in the 413th Armored Flamethrower Battalion during WW II. This Army unit of modified Sherman medium tanks was a horrifyingly effective weapon against the dug-in Japanese defenders. During the war, the auto industry and its skilled workers helped turn out thousands of trucks, tanks, ships, trains and planes in numbers that overwhelmed the Axis forces. Millions of American soldiers, aviators and sailors like my dad depended on GM, Ford and Chrysler factories. (See the period advertisement from GM’s Fisher Body division below.) Who will make the vehicles and weapons we need to defend ourselves in future conflicts?  Germany? Japan? China? France? Mexico? Will our best bet be to take over the American factories of Toyota, Nissan, Honda, Hyundai and BMW?

If we’re going to help the banking industry – which wrote bad paper on housing and vehicles that helped get us into this mess – we must do our part and bite the bullet now.

The American auto industry must do its part: build cars that are desirable not just here but internationally. Build cars that are efficient, safe and reliable and retain value. Union members must be a part of the solution. Sorry, but no one’s automatically entitled to $55-an-hour wages just because they’ve been employed at an auto plant for 20 years. That’s especially true when fellow Americans in non-union shops who make about $45 an hour turn out higher quality vehicles. Automakers should use capital to stay competitive technologically, not to cover the legacy costs of autoworkers.

High-powered, sexy cars may sell magazines and generate page views, but word-of-mouth in the Internet age trumps horsepower. There’s an amazing amount of love by fans of Ford, General Motors and Chrysler still out there – if you don’t believe that, just cruise the online forums. Don’t keep breaking their hearts and squander that faith, Detroit.

Above all, don’t tell the American consumer that your product is good enough and she/he has to accept it, because they don’t.

 

World War II sparked public and corporate patriotism.

The Auto Industry Must Restructure, Not Recover

By Randi Payton

I don’t think recovery is the right term for the auto industry restructuring. Why would it want to return to its former self, when that was not successful?

Now that the mission (of auto loans) is accomplished, it’s back to every man for himself. The industry is back to the business of not embracing more than 22% of its customers. It’s not like the industry is not doing anything to continue to sell vehicles, but it is still stuck on brand awareness to the general market, when it can be taking advantage of the need to reach in-market and the overlooked multicultural consumer.

Can you imagine meeting all day to evaluate and base key marketing decisions on research that only looks at inner-city African Americans and leaves out the 50% that live in middle and upper income zip codes? Can you also imagine spending the bulk of your multicultural dollars on only Spanish speaking Latinos and not the wealthier English dominant ones who make up 60% of the group? Well that is the current approach to reaching multicultural in-market consumers.

President Obama dispelled the myth that minorities don’t have enough income, by raising the most money in political history. So why is the auto industry still feeding minorities one or two vehicle at a time? Why are they still selecting one cultural group over another? If Obama can reach all these segments, so can the industry. The industry will, however, have to practice diversity in all aspects of its operations to succeed.

Under the current structure, it is impossible for the industry to serve the needs of minorities who have the propensity to purchase new vehicles. More PR and auto media is needed to serve the information needs of this consumer. Especially, since the general market media does not cover news of relevance to this market and non-auto media does provide enough auto coverage. The industry must take a hard look at its own challenges and needs. Embracing the multicultural consumer the right way is vital to the industry’s recovery.

Minority news media companies are closing doors as fast as minority dealers and suppliers are because many corporations have cut multicultural spending and banks won’t lend to them either. This does not look good for the industry’s future.

Automakers must take charge of their recovery and not continue allowing companies which don’t practice diversity or hiring foreign companies, that don’t understand the U.S. market, to help them reach all customers in the U.S. For example, some major auto companies continue to exclusively target Spanish speaking Latinos, while ignoring the English dominant segment, which makes up 60% of the population, according to the U.S. Census. This is a result of putting diversity in a box. Diversity has to be included in all operations, including dealerships, all vehicle launches and fuel efficient and Green campaigns.

According to R.L. POLK, 22% of new vehicles are purchased by minority consumers, and perhaps even more if the research was up to date. That is almost a quarter of the total market.

The industry cannot recover effectively if it does not execute a revolutionary approach to its restructuring. Once the industry evaluates the market correctly, by first making its partners responsible to providing adequate research on minority buyers, the result will be that multicultural and consumer automotive is vital to them reaching those consumers who are in the market today and with every product and service they have in their arsenals.

The current climate affords the industry this opportunity. And until that is done, we’re just baking the same pie over again.

 

Open Letter to Obama on Quasiturbine Technology

Dear Mr. President,

 

Canada has a solution to your green technology quest.

We have a real way to rescue the auto industry in North America.

We propose to transform the North American Auto industry itself – because making small cars is not going to be enough to save it, given the expertise and competitiveness in terms of foreign small cars, and the lack of novelty and lack of curiosity consumers have toward cars.

Without radical change on this continent, the automotive industry – regardless of the number of “bailouts” and “handouts” it receives – will continue to be a bottomless pit that will need to be supported repeatedly over the years to come in order to keep them competitive.

We must do more and provide the new drivers, whose vital revolution got you elected, with alternatives to the piston heat engine.

It is also time for America to start making amends with the planet – and build “a future in transition” that does not irritate the citizen voters of your Nation, or any other around the globe.

This revolution is called “the Quasiturbine”.

If America does not move quickly, the opportunity will be missed, for no doubt you appreciate that our foreign competitors are present, looking on to see where America goes and scheming to put an end to our industry in America.

Mr. President, if you were to make implementation of Quasiturbine engines the centre of the package that the Big 3 Auto Companies in America must accept – as a condition of their bailout – you could help to restart our North American auto industry for good.

And with Quasiturbine technologies, this could be done inexpensively, for the technology has already been developed and tested in real-world applications – for decades.

America would once again be a shining example of ingenuity to the world.

I enclose a copy of the paper on ASME Quasiturbine technology (also available on the site www.asme.org) and the technology white paper “Quantum Parallel”.

Thank you and regards,

 

Lloyd Helferty, Engineering Technologist

Product Development Specialist

603-48 Suncrest Blvd, Thornhill, ON, Canada

905-707-8754 ; 647-886-8754 (cell)

Ontario Quasiturbine Application Promotion Association (OQAPA)

www.pureinvention.com/oqapa

P.S. A fellow Chicagoan is involved in this technology.

Myron D. Stokes, son of Dr. Rufus Stokes, inventor of the “Clean Air Machine”*, has been working closely within the Auto industry and wrote the technology white paper “Quantum Parallel”, available at http://www.emotionreports.com/downloads/pdfs/FQuantum.pdf

* Dr. Rufus Stokes was a founding partner of the “Air Pollution Control Corporation of America, Inc.”, which had its headquarters in Chicago. Stokes, like many other notables such as Henry Ford and Nikola Tesla, was honored with inclusion in the United States Department of Energy’s (DOE) list of “Energy Pioneers”. http://www.eia.doe.gov/kids/history/people/pioneers.html

www.quasiturbine.com

c.c.

Presidents of Chrysler, GM and Ford Canada

Prime Minister Stephen Harper

Ontario Federation of Labour (Wayne Samuelson, President & Dana Boettger, Communications Director)

The Canadian Auto Workers Union, Ken Lewenza

Myron Stokes, senior industry analyst and commentator of eMOTION!REPORTS.com in Bloomfield Hills, Michigan.

 

The inventor Gilles Saint-Hilaire

 

American and Canadian media

GM’s Social Side Must Be Remembered

 

Ideally, corporations should be responsible citizens in our communities. Yet, very few companies do so. However, the auto industry in general, lead by GM, Chrysler and Ford, has played a massive social and economic role across the United States. For many historians, it all started when Henry Ford made the decision to offer fair wages to African American factory workers, and in the process created the black middle class. This of course, in turn, created more customers for Ford’s vehicles. 

 

And thus auto companies connected being good corporate citizens to selling vehicles. Happily, that realization translated into tens of billions of dollars of support to education and the arts, civil and social organizations, small businesses, and the development of minority executives, dealerships and suppliers. Unfortunately, these efforts are largely ignored by the mainstream press, and therefore seldom come up on the nightly news.

 

Of course GM is in a survival mode and social responsibility is the last thing on its list of priorities. Its first priority is to trim the fat and then hopefully it will have something to give back to the community. Unfortunately, since the financial analysts aren’t addressing this side of GM, communities across the country will feel the void left. Organizations may cancel or downsize fundraising events, media companies will struggle or shutdown, and dealers and suppliers and the many jobs and communities they supported will also suffer.

 

When the Big Three’s social outreach efforts are compared to most other corporations, they have no real peers. How many Americans are aware of the millions of dollars put up by Detroit after 9/11, Hurricane Katrina, and other disasters? When a major corporation sets aside 10 to 15% of its profits to give back to the community, taxpayers should applaud them. If more people saw and truly valued the massive social projects these companies have undertaken, we might not be hearing such strident cries to let them fail.

 

Yes, Detroit knew it made good business sense to connect with its customers where they live. But they also did a great deal of good. And frankly, they must have had the right idea, because their major competitors very quickly followed in their socially responsible footsteps by launching such projects of their own. But now that GM is being restructured with an eye toward returning it profitability, will that generous support of students, colleges, small businesses, and charitable programs continue? Once the restructuring of General Motors and Chrysler is complete, will they return to their caring ways?

 

Yes, the new GM and Chrysler may profit under the resulting stripped down structure. But, will the financial experts in charge recognize the value of good corporate citizenship?

 

 

Randi Payton

President & CEO

On Wheels Media

www.onwheelsinc.com


 
 


On Wheels Media is a multi-media communications company that produces print, digital, broadcast and events. Publications include African Americans On Wheels, Latinos On Wheels,
DECISIVE and DECISIVE Latino magazines. Described as the “Best Source for Cultural and Consumer News” the magazines are distributed in more than 100 newspapers throughout the United States and digitally online with a readership of 8 million. The company also produces events and launched the first automotive magazine web site www.onwheelsinc.com in 1995.  On Wheels Media established the Edward Davis Education Foundation, a non-profit organization to provide scholarships, internships and mentoring to students pursuing careers in marketing and communications.  Visit www.onwheelsinc.com for more information and to sign up for digital subscriptions and weekly newsletters.

As Black Media is Being Axed From Ad budgets

 

 During a luncheon for a select group of reporters at the National Association of Black Journalists convention in Dallas a few years ago, a senior executive at the then Chrysler Corp. made a startling concession. He said that when times got tough, multicultural marketing was one of the first budget cuts that automakers made to save money. The reasoning was that general market advertising reached too many potential car buyers to be cut.

 

On Wheels Media interviewed automotive marketing executives at some major car companies to learn what their positions are on multicultural and African American advertising, and here is what we found out:

 

That the equation has certainly changed. In the wake of plummeting sales, potential bankruptcies and government bailouts, America’s Big Six automakers have cut their advertising and marketing budgets both multicultural and general market alike. However, that’s the tip of the iceberg. The traditional auto industry is getting smaller, that means fewer products to advertise. General market agencies are beginning to target ethnic markets. The result will be less business for minority-owned ad shops.

The NAACP has positioned itself to file discrimination suits against America’s big ad agencies which could mean less available talent for minority ad agencies. And with the fierce competition for news amongst the growing number of media outlets, events once exclusively covered by black media are now often general market news. In other words, traditional black media and the agencies that serve them are being squeezed from all sides.

Chrysler, Ford, General Motors, Honda, Nissan and Toyota spent almost $7 billion in 2008 advertising on television, in magazines and newspapers, and with other media, according to TNS Media Intelligence. That does not include marketing, which generally matches measured advertising dollar for dollar. Thus, the Big Six spent about $14 billion on advertising and marketing last year. That’s less than they spent in 2007, and it will be a lot less than they spend this year.

First of all, to get an automaker to specify how much it spends on advertising and marketing is like trying to get one to reveal warranty costs; it just doesn’t happen.  But times are so tough that some information is leaking. Since Chrysler and General Motors have had to file public restructuring plans in order to receive government bailout money, their future spending is the most transparent.

GM said it will whack $800 million from its marketing budget this year. And while Chrysler would only say that it is reducing ad spending this year, Advertising Age reported that the company planned to spend only $125 million on media compared to the $800 million it spent on media in 2008.

That’s a draconian cut.

Meanwhile across town, “We haven’t taken anything out as far as the African-American perspective,” says Crystal Worthem, Ford’s Multicultural Marketing manager. “We’re making better decisions, we’re making our money work harder and smarter but we have not walked away from the market at all.”
GM did not run an ad during the Super Bowl and it had no presence at the NCAA Final Four. That saved the company millions of dollars, but the automaker also halted its support of community outreach programs like the National Kidney Foundation. It no longer funds dealer incentive trips and the company will not be a sponsor at the annual convention of the National Association of Black Journalists this year.

As Barbara Ponce, manager of Diversity Opportunity at Honda says her company is assessing all of its advertising and marketing programs, multicultural advertising and marketing included. She says Honda is keeping what gives it the greatest return on investment and jettisoning what doesn’t.

No doubt just about every automaker is doing the same thing.
R.L Polk and Company, an automotive research firm, says minorities purchase 22 percent of new vehicles. However, the consensus is that automakers don’t spend anywhere near that percentage of their advertising and marketing budgets with minority owned media, or sponsoring minority events.

When GM declined to advertise on the Super Bowl, or during the Final Four, other advertisers stepped up. But when the automaker declined to sponsor this year’s National Association of Black Journalists’ Convention and Career Fair in Tampa, FL, it’s doubtful another automaker will step in fill their spot.

When your slice of the pie is thin to begin with, it doesn’t take much of a cut to make it disappear all together.

A senior account executive at a major black-owned media outlet who declined to be identified says his industry was aware of a pending downturn last spring. “The challenge for automakers is that they have a new vehicle coming out, but they’re not sure people are going to buy it because of tough times. So the question becomes; why advertise or market it? That’s what’s been happening from September through March,” he says.

“Automakers don’t want to step out there and talk to people.”

He added that cultural differences between Mexicans, Cubans, Puerto Ricans, Central Americans, plus the language make it difficult for general market ad agencies to move into the Latino market, but the African-American market is different. With the election of Barack Obama more black faces are appearing in general market media.

“African-American agencies are in a tough spot,” he says. “General market ad agencies are now doing multicultural advertising and marketing internally. They’re going to black agencies and raiding staff by paying more money.”
“We can still cover the black college basketball tournaments; Sports Illustrated is not going to do it. But black media were not ready, especially on the print side,” he adds.

Younger blacks are getting their news from somewhere else – not Ebony, not Essence, not Jet, not even BET.com, but from Google.com, MSN.com, Yahoo.com, Facebook.com, YouTube.com, Twitter.com, etc. It’s a generational thing and black media is not a major player.

Still, says Target Market News’ Ken Smikle, “The timing really couldn’t be better for multicultural advertising. And since there is no multicultural media (the effort) targets one demographic group or another. It can be teens, young men, black households, Hispanic households. And media is more willing to negotiate. You can get more messages for fewer dollars.”

The economic slowdown has affected all marketing businesses. “But at the same time,” says Smikle, “it is yet another opportunity to create a real advantage for those willing to invest or increase their investment in targeting black consumers.”

Add an effort by the NAACP that promises to change the face of advertising, and there’s little doubt that multicultural advertising and marketing won’t be further affected. The venerable civil rights organization commissioned a study of hiring and employment practices by the “Big Four” holding companies that dominate the advertising industry. To industry observers, the results, which can be found at: www.madisonavenueproject.com, should not be surprising. But to others it’s difficult to understand how the findings could not be viewed as shocking.

Part of the executive summary says blacks made $.80 for every dollar earned by equally qualified whites, about 16 percent of large advertising firms employed no black managers or professionals, black managers and professionals in the advertising industry are only one-tenth as likely as their white counterparts to make $100,000 a year, and blacks are 62 percent as likely as their white counterparts to work in the powerful creative and client contact functions of ad agencies.

Worse, according to the study, it will take 71 years, at the present rate, to eliminate the ad industry’s current black-white employment gap. This is not an idle threat.

First, the NAACP partnered with Cyrus Mehri, a feared civil rights attorney who has won multimillion dollar judgments against Texaco, Coca-Cola, Morgan Stanley and Smith Barney in discrimination lawsuits.  Along with the late Johnny Cochran, Mehri also released a report “Black Coaches in the National Football League: Superior Performance, Inferior Opportunities.” They threatened a lawsuit which led to the hiring of more black coaches in the NFL.

But rather than threaten an immediate lawsuit against the Big Four ad agencies, the NAACP sent a letter to two dozen of the country’s largest advertisers including the Big Six automakers. The NAACP, through the office of its general counsel, cited the companies’ statements on diversity and inclusion and then asked each to instruct its general market advertising agencies to use diverse teams in creative and account management positions.

What’s more, the NAACP said that citing or establishing internship and scholarship programs had not been and will not be effective so don’t bother. The organization asked each company to name a senior executive as a point of contact for establishing methods to raise the issue with their advertising agencies.

The auto industry’s response has ranged from Chrysler’s Mike Palese saying “this is a very serious matter.  We understand what (the NAACP) is saying, we respect who (they) are and we will do our best to work within the process to help (them) make something happen.” Chrysler has designated Lisa Wicker, director of its Global Diversity Office as the NAACP’s point of contact.
Toyota said it was in the process of reviewing the letter and while it remains committed to working with minority business enterprises, “…as is the case for all of our vendors, these (ad) agencies are independent businesses, responsible for their own business practices and policies.  For this reason, we believe it will be most appropriate for the advertising industry to address the NAACP’s concerns directly.”

This issue is so sensitive that even the NAACP refused to comment “because it is still in process. But we’ll keep you abreast of any changes,” a spokesman said.

No matter what way any of this turns out – the potential law suit, automotive sales, advertising and marketing budgets, black owned media outlets, ad agencies, etc. – one safe bet is that when it comes to multicultural marketing, business as usual no longer applies. More at www.onwheelsinc.com.

 

-Frank S. Washington, Jr.

WHY GM SHOULD RUN THE FEDS

GM SHOULD BE RUNNING THE FEDS
Not The Other Way Around
 
The GM Press conference with reporters on Monday reflects the limited view the media and the administration have regarding the enormity of the social role General Motors, Chrysler and Ford play in our lives. They have primarily focused on the numbers, leaving out the social leadership activities of the Detroit automakers.
 
They complain vigorously when major industries demonstrate their only mission is to profit from and not give back to the community, but ignore the corporations that have taken on decades of social leadership. What about the tens of thousands of charitable causes, businesses, educational, and community activities where the Big Three have been leading corporate role models? In many cases they have set the example for other corporations as well as the federal government.
 
This nation needs more corporations that support society and promote business development and diversity as the Big Three have done. While most of our taxpayer dollars go to administering the government with very little reaching social programs and small businesses, the contributions of the Detroit Three exemplify the actions of concerned corporate citizens.
 
Some of the largest industries that profit from American consumers, among them entertainment, sports, medicine, insurance, technology and electronics, have no match for the  thousands of programs supported and administered by the Big Three. Their reach touches education, the arts, and community organizations, as well as small and minority businesses. Very few other industries have minority supplier goals,  federal, state and local governments included.
 
The auto manufacturers long ago set quotas to do at least five percent of business with minority suppliers, media and dealers. Meanwhile, many federal, state and local governments are still debating the issue. Because of their example, foreign based auto companies were forced to follow the example of the Big Three in doing business with minorities in the United Stares. After all, minorities buy 22% of all new vehicles annually.
 
Yet, in some industries where minorities may purchase 30 to 50 percent of the products and services, very few companies practice diversity in hiring.
 
While Detroit provided billions of dollars in scholarships, grants and sponsorships to tens of thousands of students, schools and organizations, the feds allowed private student loan companies to saddle students and parents with high interest loans and deceptive loan practices. Many of these students and parents will be in debt for years to come. What will happen to these programs under the new managements of GM and Chrysler? Do we expect the government to be as proactive in understanding the needs of all customers?
 
The Detroit three set the example of how American companies should include all races of people in its operations and business. Now, with the bankruptcy, all of this good is being ignored. The government and media have a limited view of the social contributions of the Big Three.  
 
When the numbers are added up, taxpayers will lose more from the dismantling of Chrysler and General Motors than we stand to gain. The social role of these companies stimulated more tax revenue in local and national economies than the little profit downsizing and the new management strategies plan to accomplish.
 
Yes, GM and Chrysler may profit under the stripped down structure, but what will happen to the nation’s number one corporate citizens’ support of the community?  Ignoring the vast social and business networks these companies have built over the last 100 years will have far greater repercussions on the economy than we can imagine. In the long term, taxpayers will spend far more to fill the enormous void these corporations leave behind.
 
If we were all informed of the important social role of these companies, we may have thought twice about the repercussions of bankruptcy. In this instance, many would rather GM manage the federal, state and local governments to get them contributing more to society.

Randi Payton
President & CEO
On Wheels Media
www.onwheelsinc.com

 
On Wheels Media is a multi-media communications company that produces print, digital, broadcast and events. Publications include African Americans On Wheels, Latinos On Wheels,DECISIVE and DECISIVE Latino magazines. Described as the “Best Source for Cultural and Consumer News” the magazines are distributed in more than 100 newspapers throughout the United States and digitally online with a readership of 8 million. The company also produces events and launched the first automotive magazine web site www.onwheelsinc.com in 1995.  On Wheels Media established the Edward Davis Education Foundation, a non-profit organization to provide scholarships, internships and mentoring to students pursuing careers in marketing and communications.  Visit www.onwheelsinc.com for more information and to sign up for digital subscriptions and weekly newsletters.

NAACP To Advertisers: Diversify!

During a luncheon for a select group of reporters at the National Association of Black Journalists convention in Dallas a few years ago, a senior executive at the then Chrysler Corp. made a startling concession. He said that when times got tough, multicultural marketing was one of the first budget cuts that automakers made to save money. The reasoning was that general market advertising reached too many potential car buyers to be cut.

That equation has changed. In the wake of plummeting sales, potential bankruptcies and government bailouts, America’s Big Six automakers have cut their advertising and marketing budgets both multicultural and general market alike. However, that’s the tip of the iceberg. The traditional auto industry is getting smaller, that means fewer products to advertise. General market agencies are beginning to target ethnic markets. The result will be less business for minority-owned ad shops.

The NAACP has positioned itself to file discrimination suits against America’s big ad agencies which could mean less available talent for minority ad agencies. And with the fierce competition for news amongst the growing number of media outlets, events once exclusively covered by black media are now often general market news. In other words, traditional black media and the agencies that serve them are being squeezed from all sides.

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To All the Girls I Know and All the Ones I don’t

By Valerie Menard

Sitting at the technical briefing on the new 2010 Toyota Prius, you would think talk of improvements to the hybrid technology that enhances fuel economy on the redesigned gasoline-electric hybrid to a best-in-class 50 miles per gallon combined would make a lasting impression, and they did but what I remember most was the mention of a certain symbol on the instrument panel that once and for all tells the driver on what side the gas tank is located! Callooh! Callay! Oh frabjous day! i.e. Cool! It’s about freakin’ time.

Like most women, I hate pumping gas. It’s just an unpleasant chore but it has always been made more irritating by the perplexing mystery of the moveable gas tank. Comedian Rita Rudner described the condition aptly: “I have a magic gasoline tank. No matter what side of the car I park at a gas pump, my gasoline tank moves to the other side.”

So imagine my surprise and delight to hear engineers note that in addition to all the wonderful changes on the Prius, they have also placed an arrow by the gas pump symbol in the gas gauge, denoting on what side of the car the gas tank is located.

Armed with this information, I began to check on each new Toyota I received to test drive, and lo and behold, there it is. Clearly, this is not new technology for Toyota, but oh is it ever so welcome. I don’t think it’s unique to Toyota either, and at the risk of jeers from my fellow auto journalists, i.e. “the boys,” who may have known this all along, I’m venturing a guess that it’s more common than not.

So ladies, check your gas gauge, you just might find that handy arrow and pull up on the right side of the pump, for once in your lives and evermore!

Just How Big Are the Detroit Three?

And How Much do they Save Taxpayers?

To really see how big the Detroit Three are, we have to grasp the magnitude of the role the domestic auto industry plays in all of our lives.

The D3 are among the largest car manufacturers in most developing nations as well as Europe and China. Meanwhile, in the U.S. we are arguing they do not build competitive vehicles and want to replace their leaders. Is that the reason for their troubles? Or is the collapse of the banking industry the problem – as it is for thousands of other businesses?

But what about the thousands of businesses the Detroit Three support, as well as the fact that they are the largest employer in the U.S. outside of the federal government. Yes, Detroit operated with too much bureaucracy and needed to tighten their belts, but are we making too much out of it. After all, the American auto industry is already highly regulated. The federal government has entire agencies monitoring it.

Not mentioned is their corporate leadership and how much they save taxpayers by doing work the government should be doing. While the Fed focused most of its funding on making sure vehicles are safe, there is very little government funding in the area of passive safety.

All parents should be concerned about a failing auto industry, because the number one cause of death for teenagers are vehicle crashes. While the Feds focused on making vehicles safer, the D3 took on educating drivers about such topics as seatbelt safety, as well as the use of child and booster seats. They spent billions promoting awareness, conducting teen driver programs, and giving away childseats, more than the Feds.

Small and mid-sized businesses should be alarmed as well, because the Detroit Three support far more businesses, community projects, and media than the Feds do. While banks will not provide loans to small and minority businesses, the D3 were the leaders in this area. They started the first corporate programs for doing business with minority suppliers and they were the number one advertiser in most media. They spent far more on advertising than the Feds.

While the federal government provides funding to private banks that rip students off, Detroit provides millions to students and universities in this country. They are more supportive of cultural and arts programs than the Feds as well.

The massive role the D3 plays in business and communities will collapse under a bankruptcy restructuring. And that will have a devastating impact on our society.

Finally, consider the impact on foreclosures and other industries, when former autoworkers’ retirement packages are cut in half. These people did their part to build these companies (and by extension this country), retired and invested in a lifestyle based on their justifiably anticipated retirement income.

Imagine if that income is instantly cut in half.

Thousands of retirees will have to restructure their lives to match their income and most will no longer be able to afford the neighborhoods they retired to.

All to save banks – banks that still will not provide loans to consumers and businesses, even with billions of dollars of Federal funds in their coffers. The Detroit Three need bridge funding just like most other businesses currently do. Forcing global organizations into bankruptcy because banks will not loan is not the answer.

Detroit has spent more on society, communities and businesses than they are asking for to get through this brief period.

Our reaction is to destroy the most important industry we have left?

Randi Payton

President/CEO On Wheels Media, Inc.

rpayton@onwheelsinc.com

Ignoring Diversity in Corporate Restructuring Will Reduce Future Political Fundraising Support from the Black Community

President Barack Obama may be doing a good job of repairing the nation’s economy but behind the scenes his strongest political base is eroding due to major setbacks in corporate diversity. African Americans reached into their pocketbooks to make unprecedented contributions to Mr. Obama’s presidential campaign last year. However, if the current trend of cutting diversity efforts continues, African Americans will not have the resources to financially support the president’s bid for a second term. When there’s the no work, there’s no money.

Thousands of African American small businesses, automotive dealers and suppliers, minority –owned media outlets and their employees are feeling the brunt of the recession. Businesses cannot get loans, corporations are laying off employees at an alarming rate and domestic automakers, the second largest employer of African Americans outside of the federal government, don’t see diversity as a priority during this economic crisis.

Minority car dealers and minority automotive suppliers who had the funds to support President Obama’s first run for the presidency will almost disappear  because of the current economic crisis. Automakers have been corporate leaders in diversity for at least a generation. But diversity is not being considered in the restructuring plans of the domestic automotive industry.

Automakers that championed diversity and encouraged their ad agencies to support it, but did not require those same agencies to practice it, are now dropping diversity advertising and marketing altogether or making significant cuts.  Corporations are too concerned with their survival to focus on diversity advertising and marketing which should be an essential part of restructuring. However, it has been looked at as affirmative action instead of a need to reach more than 30 percent of American consumers.

Minority dealers and suppliers who represented a huge financial support base for President Obama during his presidential campaign cannot get financing to operate their businesses and they have lost the support of larger companies that cannot get credit themselves. Not only has progress on this front ceased but all these businesses are closing at an alarming rate.

Small minority businesses experienced huge growth; their owners who  often used equity in their homes to finance their start-ups can no longer do so and SBA and VA backed financing is frozen. The banks simply will not loan, although the Obama Administration has pumped money into them to free up the secondary finance markets. Banks either don’t have the cash or they are using the federal money to generate interest payments and to repay the government to escape federal oversight. But small minority-owned businesses have been left out of this equation.

African American employees, who were making inroads into upper management positions when diversity was a corporate priority, are now the first to be cut during tough times. Their input was never really valued; even those who have proven track records of success.

One 30-year senior executive at General Motors told me that this is the worse time that she has ever seen for diversity. Progress in that area is quietly being set-back. President Obama needs to appoint a diversity czar to protect the interests of minority consumers.

Other black politicians as well as President Obama should also be worried because they all need financially healthy voters to support their political campaigns. The ultra conservatives have yet another trick up their sleeve to destroy the economic base of minority consumers. They have one goal in mind – force the domestic automakers into bankruptcy and destroy the unions and the middle class. The current trend is having a devastating impact on African American middle class workers and it would make it difficult for all African American office seekers and incumbents, not just the president, to get future financial support from the black community.
Randi Payton
rpayton@onwheelsinc.com

Ignoring Diversity in Corporate Restructuring will Reduce Future Political Fundraising Support from the Black Community

 

President Barack Obama may be doing a good job of repairing the nation’s economy but behind the scenes his strongest political base is eroding due to major setbacks in corporate diversity. African Americans reached into their pocketbooks to make unprecedented contributions to Mr. Obama’s presidential campaign last year. However, if the current trend of cutting diversity efforts continues, African Americans will not have the resources to financially support the president’s bid for a second term. When there’s the no work, there’s no money.

 Thousands of African American small businesses, automotive dealers and suppliers, minority –owned media outlets and their employees are feeling the brunt of the recession. Businesses cannot get loans, corporations are laying off employees at an alarming rate and domestic automakers, the second largest employer of African Americans outside of the federal government, don’t see diversity as a priority during this economic crisis.

 Minority car dealers and minority automotive suppliers who had the funds to support President Obama’s first run for the presidency will almost disappear  because of the current economic crisis. Automakers have been corporate leaders in diversity for at least a generation. But diversity is not being considered in the restructuring plans of the domestic automotive industry.

 Automakers that championed diversity and encouraged their ad agencies to support it, but did not require those same agencies to practice it, are now dropping diversity advertising and marketing altogether or making significant cuts.  Corporations are too concerned with their survival to focus on diversity advertising and marketing which should be an essential part of restructuring. However, it has been looked at as affirmative action instead of a need to reach more than 30 percent of American consumers.

 Minority dealers and suppliers who represented a huge financial support base for President Obama during his presidential campaign cannot get financing to operate their businesses and they have lost the support of larger companies that cannot get credit themselves. Not only has progress on this front ceased but all these businesses are closing at an alarming rate.

 Small minority businesses experienced huge growth; their owners who  often used equity in their homes to finance their start-ups can no longer do so and SBA and VA backed financing is frozen. The banks simply will not loan, although the Obama Administration has pumped money into them to free up the secondary finance markets. Banks either don’t have the cash or they are using the federal money to generate interest payments and to repay the government to escape federal oversight. But small minority-owned businesses have been left out of this equation.

 African American employees, who were making inroads into upper management positions when diversity was a corporate priority, are now the first to be cut during tough times. Their input was never really valued; even those who have proven track records of success.

 One 30-year senior executive at General Motors told me that this is the worse time that she has ever seen for diversity. Progress in that area is quietly being set-back. President Obama needs to appoint a diversity czar to protect the interests of minority consumers.

 Other black politicians as well as President Obama should also be worried because they all need financially healthy voters to support their political campaigns. The ultra conservatives have yet another trick up their sleeve to destroy the economic base of minority consumers. They have one goal in mind – force the domestic automakers into bankruptcy and destroy the unions and the middle class. The current trend is having a devastating impact on African American middle class workers and it would make it difficult for all African American office seekers and incumbents, not just the president, to get future financial support from the black community.

 

Randi Payton

rpayton@onwheelsinc.con

www.onwheelsinc.com