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Survey: GM loan ad aids firm's image

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Survey: GM loan ad aids firm's image

David Welch / Bloomberg News

General Motors Co. sparked Republican criticism and a regulatory complaint by saying in commercials it had repaid U.S. loans. The ads did succeed in repairing the automaker's image with some consumers.

Surveys by YouGov, a London company that measures public perception of businesses, showed consumers have a more favorable view of GM since Chief Executive Officer Ed Whitacre's ad proclaimed repayment "in full, with interest, five years ahead of the original schedule." It now has a stronger image than Toyota and has gained ground on Ford.

"This could buy GM some goodwill," Ted Marzilli, managing director of YouGov's BrandIndex, said. "It's a statistically significant move for GM and it was largely related to the loan repayment."

GM's image retooling has proved a challenge: Whitacre has changed the biggest U.S. automaker's sales and marketing leadership three times since December. Earlier this month, he hired Joel Ewanick from the North American unit of Nissan as vice president of marketing, replacing Susan Docherty, who will be reassigned after two months in the job.

The automaker has been trying to improve its standing since emerging from its U.S.-backed bankruptcy. Some consumers still shy away from its vehicles and the criticism reinforces negative impressions, said Jim Hall, principal of 2953 Analytics, a consulting firm in Birmingham.

"They are working against the perception that they are Government Motors," Hall said. "GM is still in the marketing mode of overpromising and underdelivering."

YouGov surveyed 5,000 people daily and combined positive and negative reactions to create an index between 100 and -100. GM's positive rating had risen to 17 from 12 after announcing that the company paid off the loans.

Ford's current BrandIndex score is 36, Marzilli said. The rating for Toyota was 45 on Jan. 1. News of safety recalls by the automaker has dropped its score to -1, Marzilli said.

For GM, "we don't know if it will last one week or one month," he said. "It could be the start of something good."

As the Whitacre ad ran repeatedly through April 27, at least three Republicans complained that GM was repaying government debt with cash raised from the U.S. Treasury's acquisition of 61 percent of GM.

GM got $50 billion in aid, mostly from the Treasury Department's Troubled Asset Relief Program. About $8.4 billion was repaid to the U.S., Canada and Ontario governments and $42 billion was for common and preferred stock.

"They're paying it back with bailout money that they had from the federal government in the first place," Sen. Charles Grassley, an Iowa Republican, said in a video on his website.

Reps. Jim Jordan, R-Ohio, and Darrell Issa, R-Calif., criticized as a "lie" Whitacre's ad in a letter released late last month. Republicans have expressed opposition to the automaker bailouts.

The Competitive Enterprise Institute, an advocacy group devoted to "free enterprise and limited government," said it filed a complaint with the Federal Trade Commission, claiming false advertising by GM.

Betsy Lordan, an FTC spokeswoman, said the agency doesn't comment on whether it's investigating a specific complaint. Steven Rattner, the former head of President Barack Obama's automotive task force, said this month at a conference in Detroit that GM "slightly elasticized things" in its ads. He said the automaker implied federal funds granted in GM's bankruptcy restructuring had been fully repaid.

GM defends its ad, created with agency McCann Erickson in Detroit. Selim Bingol, a GM spokesman, said it doesn't say the automaker returned the government's investment.

"It accurately communicated what we did, which was pay back the loans," he said, adding that GM's own research found that consumers responded favorably.

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From The Detroit News: http://detnews.com/article/20100527/AUTO03/5270370/1148/auto01/Survey--GM-loan-ad-aids-firm-s-image#ixzz0p8LbVS4m

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