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GM ad campaign draws fire

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GM ad campaign draws fire

Critics: CEO's boast on loans misleading



General Motors is struggling to find its marketing message as it works to improve its image in a politically charged environment.

The Detroit automaker has received heavy criticism for advertisements that ran for a week following GM's final $5.8 -billion loan repayments last month to the U.S. Treasury and Canadian governments. Chairman and CEO Ed Whitacre touted the company's repayment of the government loans "in full."

In a complaint to the Federal Trade Commission, the Competitive Enterprise Institute cried foul last week -- as did some Republican lawmakers. The ad "gives the false impression that GM has used its own funds to pay back all the bailout money that it received from the federal government," the nonprofit think tank said. "In fact, GM has only repaid a fraction of those funds."

The real payoff for taxpayers will come once GM goes public again and the governments can sell their stakes in the company.

Even Steven Rattner, the former head of the auto task force, said this week that GM "may have slightly elasticized the reality."

What GM is trying to do is focus on its improving quality and new vehicles. But even those advertisements, which focus heavily on accolades from Consumers Digest magazine, face criticism because the publication charges winners a fee to mention the Best Buy ratings.

Edmunds.com CEO Jeremy Anwyl said the carmaker took a risk with both campaigns that could hurt GM's credibility. "They have a common element, which I call, selective disclosure. ... It's just a bad practice," he said.

GM defends its actions, saying the Whitacre ad was not meant to mislead and that the Consumers Digest ads are standard within the industry. "I don't see any cause for alarm," Dave Roman, a GM spokesman, said. "Right now, obviously, we're under a huge microscope, and everything is getting picked apart," he added later.



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