The federal government cut Chrysler's advertising budget by half:
The Obama administration appears to have reminded Chrysler about the cost of accepting government bailouts: with federal funds comes federal control.
A report this week in Advertising Age said that Chrysler wanted to spend $134 million in advertising over the nine-week duration of its bankruptcy. But Mr. Obama's auto-industry task force sliced that figure in half.
Robert Manzo, executive director of Capstone Advisory Group and a Chrysler consultant, testified at a May 4 hearing in bankruptcy court that the task force "believed that it was not feasible to not spend anything on marketing and advertising for fear of eroding the image of the brand." But, Ad Age said, the task force overruled the car maker. . . .
Mr. Obama's Presidential Task Force on the Auto Industry includes Treasury Secretary Tim Geithner and officials from the Commerce, Transportation, Labor, and Energy departments, plus representatives of the EPA, White House, the Economic Recovery Advisory Board, and the National Economic Council. It includes no professional marketers.
Expect bailout-recipient General Motors to be paying close attention.
This cut might be a sound executive decision or it might not, but I think it should be made by Chrysler management and the bankruptcy court.