COMMENTARY: GM Hits a Homerun with Corvette Giveaway
June 07, 2010
General Motors came under scrutiny yet-again -- this time for giving away a Chevrolet 
Corvette to Detroit Tigers baseball pitcher Armando Galarraga, who was robbed of a perfect game on an admitted bad call.
The New York Times, in an article headlined "GM's Gift of Luxury Stuns Few," questioned whether GM, as a mostly taxpayer-owned company should be giving away cars. USA Today more pointedly asked "Was Taxpayer-owned GM Right to Give Away a Corvette to a Detroit Pitcher?"
Phooey to the critics. The play was a GM homerun.
Critics Pounce
Not surprisingly, The New York Times found a Congressman -- Rep. Darrell Issa, R-California - ready to pounce on the topic.
"A free sports car for a Detroit Tigers baseball player was not among the reasons the government saved General Motors from financial collapse," he told The Times. He added that GM shouldn't be handing out too many gifts until the federal government is no longer an investor. The paper said his view was shared by others.
USA Today added that "millions of Americans have lost of their jobs in the past couple of years, faced illnesses without health insurance, had their homes foreclosed, and no one gave them a free sports car."
Bargain Promotion
Indeed, GM is in the business of selling cars, but, frankly, GM has found few takers for the Corvette of late. Vette sales dropped 13 percent in May, pushing them 19 percent lower for the year, compared to 2009, when the iconic sports car saw its lowest sales in 50 years, according to Edmunds.com. So far in 2010, GM has sold a scant 4,950 Corvettes. That's despite a $3,000 cash incentive or zero- to low-interest financing being offered, according to Edmunds.com.
Before an automaker can sell cars, it has to market and promote them. In fact, GM, more than ever, must promote and market its cars so that the company can sell cars, keep costs down, return to profitability and repay taxpayers by going public.
With the Corvette giveaway, taxpayers got a bargain with the positive publicity generated. As taxpayer/shareholder, I'm in favor of getting a bargain in the otherwise expensive realm of advertising. Giving the Corvette to Galarraga cost GM -- and the taxpayers -- less than $56,000. According to Edmunds.com's True Market Value calculations, the typical Corvette sells for about $55,648. That buys virtually nothing in the way of advertising.
In fact, the kind of promotion GM got with the Corvette couldn't have been purchased with any amount of cash. GM's quick play -- a plan developed and executed in a mere 18 hours -- was a marketing and public relations homerun.
Automakers routinely give away cars; it's part of doing business. My 18-year-old son noted a host of cars of all makes in the movie "Killers" this weekend. The studios don't buy for those; they are given to them by the automakers. What's the return on investment of product placements? No one knows.
What might better be questioned is GM's reported return to Super Bowl advertising -- ads that cost a couple million each -- or those God-awful ads starring GM Chairman and CEO Ed Whitacre -- two rounds of them! -- at a cost of who knows what even less known on the return on the undoubtedly hefty investment.
A Natural
The Corvette giveaway was a natural for Chevrolet. Chevrolet is baseball. Remember what may be the best slogan in Chevy's advertising history? "Baseball, hot dogs, apple pie and Chevrolet." Chevy has long sponsored baseball, is a sponsor of Detroit's Comerica Park where the now-famous play occurred and is constructing ballparks for kids across the country.
Plus how could GM go wrong with a story as captivating as "Casey at the Bat."
Bottom of the ninth, Galarraga is one out away from pitching a perfect game. Cleveland Indians' Jason Donald hits a ground ball between first and second base, which is fielded by Tiger's first basement Miguel Cabrera. He throws to Galarraga, who steps on first base. Umpire Jim Joyce calls it safe, ending Galarraga's destiny to the record books for throwing a perfect game.
But the story gets better. Umpire Joyce tearfully admits publicly and personally to Galarraga that he missed the call; Galarraga forgives him. Next day, as Joyce readies himself to ump behind home plate, Galarraga personally delivers to Joyce the roster as an olive branch. It is then that GM President North America Mark Reuss rolls up to the plate in a 2010 Chevrolet Corvette, presenting the gift to Galarraga for his on and off the field performance.
Chevrolet did well to associate with a couple of decent, classy men in a sports world more often in the news for overblown salaries, equally overblown egos, drug abuse and other indiscretions.
Like millions of others, my baseball-loving teenage son was watching the game. He yelled to me as the red Corvette with the beige convertible top approached home plate. He immediatley logged onto Facebook to share the news.
As the news went viral on the Internet, the Corvette giveaway made headlines on every news, sports and entertainment program - publicity you can't buy.
There's plenty to criticize GM for -- and we do and will -- but on the Corvette giveaway, Chevy hit one out of the park. -- Michelle Krebs, Senior Analyst and Editor at Large
Photo by GM
GM President North American Mark Reuss (right) shakes hands with Detroit Tigers pitcher Armado Galarraga as he tells him he's the recipient of a new Chevrolet Corvette.
Posted by Michelle Krebs at 6:52 AM under Commentary , GM | Comments (2) | digg this | Seed Newsvine
I'm no marketing whiz (heh, I'm not even in the car biz), but doesn't that kind of thing tend to generate favorable publicity, which tends to lead to sales?
It's all fun & games until someone pokes an eye out from all this finger pointing.
Posted by: dzielke | June 07, 2010 at 11:10 AM
It was total BS......how about giving a car to some real heros......like our returning troops from the mid east?
Posted by: bodyblue | June 07, 2010 at 4:23 PM