Ford's decision to skip a federal bailout is making Americans far more likely to consider buying products like this 2010 Taurus SHO.
It seemed, to many, like a big risk when Ford Motor Co. decided not to pursue a federal bailout, late last year, but in hindsight, it could have been one of the smartest moves the automaker has ever made.
Not only was Ford able to avoid bankruptcy – and the possibility of coming under government domination, like Chrysler and General Motors – but its decision has struck a responsive chord with American consumer.
A new survey of American consumers finds 46% now saying they’re more likely to buy a car from the automaker than before because it didn’t take cash from the Treasury. The national telephone survey, by Rasmussen Reports, also reveals that nearly one in five Americans – or a friend or family member – decided not to go for a GM or Chrysler product because those two makers have accepted a bailout.
A majority of Americans, 53%, believe it is at least somewhat likely that Washington will pass laws or enact regulations to protect its equity stake in GM and Chrysler, giving them an unfair advantage over Ford. In fact, 30% say it is very likely, though such suspicions have eased slightly, according to Rasmussen researchers, since a similar poll was taken, in May.
But such concerns are particularly strong among investors, a full one-third of whom expect the government to act in favor of GM and Chrysler. Among that group, 51% are more likely to buy a Ford. Private sector employees, meanwhile, are now significantly more likely to switch to Ford when compared to government employees.
General Motors officials have acknowledged that their bankruptcy and bailout are not resonating well with the American public. That’s one reason why GM CEO Fritz Henderson had said, on several occasions, that it would be critical to get through the Chapter 11 process as quickly as possible. And, indeed, it took the automaker just 40 days to emerge. But that apparently hasn’t had much of an impact. According to Rasmussen data, only 17% of those polled say they’re more likely to buy a GM vehicle, now that the company is out of bankruptcy. But 22% say they’re less likely.
Recent Rasmussen polls have had very little good news for GM. In June, only 42% of Americans who currently own a GM product say they’d go back to the maker for their next vehicle. In the new poll, 41% of Americans said they expect the quality of GM products to decrease now that the federal government owns a majority stake. Only 19% anticipate quality improving.
Rasmussen researchers echo other pollsters in pointing out the strong and consistent public opposition to an automotive bailout. Only 26% see federal ownership of a majority stake in GM as a good idea. On the other hand, 17% say Americans should protest the bailout by boycotting the company’s products.
A full 80% of those polled say they want to see the government sell off its stake in both GM and Chrysler “as soon as possible,” reported Rasmussen.
While I agree that Ford has undoubtedly earned the respect of the American public and increased its consideration by not having to go through a bankruptcy, I am not sure that the Rasmussen Report premise of lower consideration for GM and Chrysler products will prove to be true.
Most people have never considered buying a GM product, they consider buying a Cadillac, a Buick, a Chevy, or a GMC Truck. If the management of GM is smart, they will stop running any ads about GM and focus on ads for their individual brands. If you talk to people outside the industry, you would be amazed how many do not have a strong sense of which company owns which brand. GM should use this fact to their advantage. The only people who need to know that General Motors even exists is the investment community and the information they are interested in is not found in advertisements.
Chrysler has more of a problem in this area because one of their brands actually has the Chrysler name. But ask yourself, do you think people will not consider buying a Jeep because Chrysler has had a bankruptcy? I do not think it will influence many Jeep customers.
Ford definitely has the best seat in the domestic house at this time. They should keep their quality up, their prices reasonable, and their new products rolling out on time. They will grab market share that it will take the competition decades to win back, if ever. GM and Chrysler have far bigger problems, but if they can focus on what it takes to define and support their brands, and address the needs of thier customers, they could still have a fighting chance.
Bob,
Some very valid points. A sizable share of folks might have said they’d boycott GM, even two years ago, if asked a question like: “Would you be willing to boycott GM because they aren’t building enough small cars…” or “…because they employ union labor,” or “…because they’re spending money in China instead of employing more Americans.”
And as for where people will actually spend their money, well, let’s see. It’s easier to speak out in favor of Ford if you’re not actually buying. And it’s easier to actually buy a Ford if they’re finally producing some good products.
I don’t want to minimize the PR hits GM and Chrysler are taking. And I absolutely agree about the need to start telling the public about product, not about the corporation.
Frankly, if both GM and Chrysler start churning out good product and score well in such things as the Power IQS, that will eventually work in their favor. I question whether GM can hit 18+ points of market share, at least initially, but I won’t rule it out, either.
Paul A. Eisenstein
Bureau Chief, TheDetroitBureau.com
People don’t like the idea of government bailouts in general, so GM and Chrysler are taking a hit for entering the political landscape. But consumers don’t have a problem taking a personal bailout, via “Cash for Clunkers” and sales tax deductions and hybrid incentives.
Yes, Rob, ironic, isn’t it. Had the government told the automakers, “We will provide incentives to you to pass onto consumers,” even if the feds required a 100% pass-through, the public would’ve gone nuts.
Paul A. Eisenstein
Bureau Chief, TheDetroitBureau.com
One thing that wasn’t mentioned is product. Chrysler doesn’t really have any. GM, apart from the Malibu, doesn’t either. Ford, on the other hand, keeps coming out with fresh products. The Fusion seems to be a hit where I live, and the rest of their lineup is coming along. The new Taurus seems pricey in this market, but the Fiesta could be a real hit. Could it be that peoples’ perceptions of an automaker might have something to do with the cars it makes?