Ford Had a Better Idea by Not Taking Bailout, But Some Media Forget To Report It
Ford Motor Company took everyone by "surprise" Nov. 2, when it announced nearly a billion dollars in profit for the third quarter of 2009. The company also said it would be "solidly profitable" by 2011.
CNN repeated the announcement on Nov. 3 "American Morning," saying, "Turning now to the Big Three in Detroit, Chrysler extends its buyout offer to more than 20,000 employees while General Motors is still trying to restructure spending billions of bailout dollars, but Ford - which didn't take any cash from Uncle Sam - is back in the green again, posting a profit of nearly $1 billion for the third quarter."
The announcement was big news, but what should have caught more journalists' attention was the fact that Ford managed to turn things around without the help of a federal bailout - the very bailout reporters promoted in 2008 and 2009.
Yet, several shows including all three networks' morning programs, CBS "Evening News," CNN's "Anderson Cooper 360," and MSNBC News Live all left out that crucial piece of information Nov. 2.
But that Nov. 2 report, the "Evening News" found room to include union complaints against Ford, quoting UAW's Gary Walkowicz: "I think people are angry and fed up with concessions. We've dealt with concessions year after year for the last five years. I people - think people got to the point of saying, ‘Enough is enough that's it.'"
One year ago, the network news media avidly supported a federal bailout for the Big Three U.S. auto companies and ignored union responsibility for lack of competitiveness.
"GM may not make it without help, and others may have to merge," declared "Nightly News" anchor Brian Williams in November 2008. "If just one of the Big Three were to fail, an estimated two and a half million jobs might be lost."
ABC correspondent Chris Bury suggested on Nov. 11, 2008 that it was a matter of fairness, after all, the banks had already been bailed out: "After riding to Wall Street's rescue can the government just say no to American automakers that are bleeding cash by the billions."
Between Nov. 1 and Nov. 18, 2008 the morning and evening shows of ABC, CBS and NBC aired 31 stories with a pro-bailout tone, which was almost three times as many positive stories as balanced stories - only 12. Only one story, on ABC's "Good Morning America," presented an overall anti-bailout tone.
According to Reuters, GM and Chrysler received "roughly $64 billion in direct aid" from the government. Since then both companies have struggled. Chrysler saw sales fall 30 percent in October 2009, while GM saw a slight "bump" in sales of 4.7 percent the same month.
The media promotion of an auto bailout did not reflect public opinion. Back then 49 percent of Americans were opposed to an auto industry bailout and 47 percent were in favor, according to Gallup.
But according to Rick Newman, chief business correspondent for U.S. News and World Report, anti-bailout sentiment might have been exactly what helped Ford rise to profitability.
"[T]hey've taken market share from GM and Chrysler. Clearly a lot of people who wanna buy a domestic car, but were disgusted by the auto bailouts went over to Ford," Newman told CNN's "American Morning" Nov. 3, 2009.
NBC "Nightly News" and "World News" also indicated the same day that Ford's decision not to take the bailout improved the public's perception of the company and "richly rewarded" them.
You can find the rest of this report on the Business & Media Institute Web site.