DETROIT: Automakers took a serious blow last night when the Senate rejected the industry's bailout plan. Although help could still come from the the White House, Detroit's Big Three continue to depend on their communications departments and PR agencies to help them navigate a particularly uncertain future.
“At the moment, we're completely focused on the Washington, DC, effort [of] communicating to all of our constituent groups, and it's been changing every day,” said Katie Hepler, manager of corporate communications for Chrysler.
In the past few weeks, both General Motors (GM) and Chrysler's main focus has been on their survival.
“We've had to continue to do everything we normally do, while focus[ing] on the battle that we have in Congress to secure some aid,” said Steve Harris, VP of global communications at GM. “It's a unique challenge, and... not sure a lot of people have gone through it, but it's in many ways exhilarating and exhausting.”
GM has been mobilizing its agencies, including Weber Shandwick, MS&L, and TMG Strategies, to assist on a “large third-party outreach effort, to get people to speak out in support of the industry and GM, in particular,” Harris said.
GM sought to tap more than 1,300 influencers, including academics, economists, and members of the business community. Harris said more than 80% of those have been contacted and 400 spoke out in support of it, Harris said.
“We've certainly tried to present as positive a story of what GM has done,” said Harris. “I think there's a lot of old information out there. Facts we hear people throwing around, go back to the '80s and '90s, and don't really reflect what's been happening in the last five or 10 years.”
While Harris confirmed to PRWeek that GM's budgets will be reduced across the board for 2009, he rejected reports that the company's agencies will be consolidated under one holding company.
“Our agencies work really well together, like on this third-party outreach… I don't see the advantage to that, at this time,” said Harris.
Automakers' agencies continue to work with the Big Three, though with some differences. Some are also focused on diversifying.
MS&L told PRWeek it accepted a temporary 2009 rate reduction.
“GM's in a critical time,” added Dan McGinn, TMG Strategies' CEO. “We will deliver whatever service support they need to succeed.” He declined to go into budget specifics, though.
Like GM, Chrysler's budget for 2009 has not yet been finalized, Hepler said, but in recent weeks, the automaker has launched media outreach, via platforms such as GrabDemocracyByTheHorns.com and other grassroots campaigns. She declined to discuss the automaker's work with agencies.
Kim Skeltis, MD, SVP, and partner at Detroit's Stratacomm, which has assisted Chrysler on PR, declined to discuss how it would be affected by the automaker's financial restructuring. She did say that the firm's operational structure “helps us weather changes like we're seeing in the Detroit market,” because it is not an one-industry shop.
“Stratacomm's DC-based public affairs office and parent company Fleishman-Hillard also differentiates us from independently firms in Detroit and further diversifies our client base,” Skeltis said.
Ford maintains PR budget
While GM and Chrysler fight to stay solvent, Ford's more stable financial footing has enabled it to not only maintain its PR budget for 2009, but also create “an even more aggressive communications program planned in the coming months and throughout 2009,” Ray Day, VP of communications for Ford, said via e-mail. Nor are there any plans to “scale back” agency partnerships, he added.
“We plan to take full advantage of the heightened national attention on our company,” Day said, noting the promotion of new Ford, Lincoln, and Mercury products. “We view this as a huge opportunity from a communications standpoint.” The communications department is “increasing activities in several areas,” such as social media and TheFordStory.com, he said.
“Regarding people reductions internally, all areas within Ford in North America are working to reduce salaried-related costs, and the communications team is on plan,” he said.
Yet, there have been “no reduction in PR salaries. Reduction is in in-house staff via an overall salaried-related cost task,” he added.
Agencies, which have assisted Ford, include Hill & Knowlton, Ogilvy PR, and PCGCampbell.
Kevin Kennedy, EVP at PCGCampbell, confirmed by e-mail, that the agency's “responsibilities [for the automaker] have not really changed,” but added “we are facing budget cuts for many of our projects. That's not a surprise.”
“Most of the things we work on fall under marketing and sales at Ford, and as their budgets have been cut, we have had our budgets cut as well,” Kennedy said.
In response to these changes, PCGCampbell has been seeking out “new, non-Big [Three] business for the past year, including areas outside of automotive wherever possible,” he added. “[We] also have been working to further market some of our other competencies, like interactive media and research.”