The Ripple Effect of Detroit Woes

It is still uncertain what will happen with the troubled GM, whether that corrective action will be a government bailout, bankruptcy protection or some combination remains to be seen. One thing that is obviously clear is that none of the options are attractive to the people they effect. There has been much media coverage about the overall reaching impacts from job losses; not only at the OEM level but also for supporting services to the automotive industry such as the suppliers that also employee staff to produce parts that go into the vehicles and various other labor required to support a manufacturing endeavored of that nature.

There is also the impact to the advertising world. Automotive comes in a very close second to retail in ad category spending. Think about what brands you see most often from your own experience. If those brands go away, I don’t think the remaining automakers will require much advertising to pick up sales as the field is narrowed. This has a significant impact on media and agencies alike.

This is not just an issue for Detroit, the ripple effect continues outward at the local level with the dealerships that will no longer be advertising as well. Many people simply will not consider buying a vehicle from a manufacturer facing bankruptcy as concerns over warranties and future service come front and center on consumer’s minds. Dealerships are getting hit hard with this reality, as they face their own challenges, closing doors at record rates, they too are no longer contributing to advertising.