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  • Car Ads Lead the Top Ten Most Shared Video List for February

    Cars (and trucks) dominated the old ad models. Before the digital age, print and broadcast media depended on the automakers for a hefty percentage of their overall ad sales. So it is interesting to watch for signs of their success in developing digital models. Ads for cars were back in a big way during the Super Bowl this year. That's not a huge surprise. But some of the Super Bowl ads went viral in a big way. That is, they succeeded in getting attention online. So Chrysler, which opted to use all the ad time it purchased for the big game in one chunk, saw its ad play over 8 million times online. And Volkswagen did even better with this ad: That ad was the most-shared video for the month of February, according to Marketing Vox. Chrysler's was second. You can see the top ten list here .

  • COP January Report: 'An Update on TARP Support for Domestic Automotive Industry'

    If the purchasing of Super Bowl ads is any indication, then the market for cars is much brighter than years past. And two US automakers--GM and Chrysler--that were on the verge of collapse two years ago are among the big spenders this year, according to the Detroit Free Press . So does this mean the Treasury's so-called bailouts of GM and Chrysler were clear successes? Maybe, maybe not, seems to be the answer from the Congressional Oversight Panel (tasked with evaluating the Treasury's handling of TARP funds). From the January COP report: Treasury is currently unwinding its stakes in GM, Chrysler, and GMAC/Ally Financial. Of those companies, GM is furthest along in the process of repaying taxpayers. It conducted an initial public offering (IPO) on November 18, 2010, and Treasury used the occasion to sell a portion of its GM holdings for $13.5 billion. This sale represents a major recovery of taxpayer funds, but it is important to note that Treasury received a price of $33.00 per share - well below the $44.59 needed to be on track to recover fully taxpayers‟ money. By selling stock for less than this break-even price, Treasury essentially "locked in" a loss of billions of dollars and thus greatly reduced the likelihood that taxpayers will ever be repaid in full. Treasury has explained its decision to sell at a loss by saying that it wished to unwind government ownership of the automobile industry as quickly as possible. This justification may very well be reasonable, but it is difficult to evaluate. Because Treasury has cited different, conflicting goals for its automotive interventions at different times - saying, for example, that it wished to save American jobs, to produce the best possible return to taxpayers, or to return the company to private ownership as rapidly as possible - it is difficult for the Panel or any outside observer to judge whether Treasury‟s results in fact qualify as successful. Read the full report here . And watch COP Chair Ted Kaufman introduce the report:

  • COP September Report: US Automakers, Government Ownership, and Potential Conflicts

    In its September report, the Congressional Oversight Panel (COP) looks into the impact of the use of TARP funds to keep US automakers Chrysler and GM from going under. The panel looked first at whether Treasury broke any rules in bailing out the companies, and found that the government's behavior was "largely in line with the practices of other large bankruptcies," and that no bankruptcy laws were broken. But there are now added concerns about how the intersection of politics and business puts the government in a tricky situation as part owner of the automakers. And COP, predictably, is calling for more transparency: American taxpayers now own 10 percent and 61 percent of the new Chrysler and GM companies respectively. Treasury's support for the automotive industry differed significantly from its assistance to the banking industry. The bulk of the funds were available only after the companies had filed for bankruptcy, wiping out their old shareholders, cutting their labor costs, reducing their debt obligations and replacing some top management. The government's role raises serious oversight issues, particularly Treasury's conflict between competing objectives. The Panel recommends that, to mitigate the potential conflicts and political issues inherent in owning Chrysler and GM shares, Treasury should take exceptional care to explain its decision making and provide a full, transparent picture of its actions. The Panel also recommends that Treasury consider placing its GM and Chrysler shares in an independent trust that would be insulated from political pressure and government interference. You can read the full report here . Also, COP chair Elizabeth Warren speaks about the September report in this video:

  • Obama Administration on Viability of Automakers' Restructuring Plans

    Chrysler and General Motors submitted viability plans to The White House back in February, and as part of the Treasury Department's agreement with the automakers, the Obama Administration was to give an evaluation of the plans by March 31. The Administration has determined that these plans are not viable. As stated in a report released this morning, "In their current form, they are not sufficient to justify a substantial new investment of taxpayer resources." But, the automakers are not out of time...yet. The Administration is giving them time and capital to work out viable plans. GM gets more time than Chrysler--60 days compared to 30--but will have to operate without CEO Rick Wagoner , who is stepping down at the request of the White House . Chrysler needs to work out a satisfactory partnership with Fiat. From the White House report: • General Motors: While GM’s current plan is not viable, the Administration is confident that with a more fundamental restructuring, GM will emerge from this process as a stronger more competitive business. This process will include leadership changes at GM and an increased effort by the U.S. Treasury and outside advisors to assist with the company’s restructuring effort. Rick Wagoner is stepping aside as Chairman and CEO. In this context, the Administration will provide GM with working capital for 60 days to develop a more aggressive restructuring plan and a credible strategy to implement such a plan. The Administration will stand behind GM’s restructuring effort. • Chrysler: After extensive consultation with financial and industry experts, the administration has reluctantly concluded that Chrysler is not viable as a stand-alone company. However, Chrysler has reached an understanding with Fiat that could be the basis of a path to viability. Fiat is prepared to transfer valuable technology to Chrysler and, after extensive consultation with the Administration, has committed to building new fuel efficient cars and engines in U.S. factories. At the same time, however, there are substantial hurdles to overcome before this deal can become a reality. Therefore, the Administration will provide Chrysler with working capital for 30 days to conclude a definitive agreement with Fiat and secure the support of necessary stakeholders. If successful, the government will consider investing up to the additional $6 billion requested by Chrysler to help this partnership succeed. If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler. You can read the full report here . President Obama is expected to speak to the findings in this report later today. He did speak to the Administration's overall view of the automakers' plans and the government's hope to keep GM and Chrysler afloat yesterday on CBS's Face the Nation . Here's an excerpt: Watch CBS Videos Online