Behind American auto’s latest public relations campaign lies a bleak economic reality.
Olivier François is a storyteller. We love his stories. A modern-day de Tocqueville, he has come to America to tell us about hard work and sacrifice, about revival, about a new American century. He also tells us to buy Chrysler cars.
François is the Chief Marketing Officer for Fiat, the Italian car company that now owns Chrysler. He and his team created the “Imported from Detroit” (IFD) ad campaign and this year’s “So God Made a Farmer” Dodge Ram commercial. The original 2011 “Born of Fire” IFD spot made a big splash. It won an Effie and Advertising Age’s “Marketer of the Year” award in 2012 and, if we are to believe the hype, it transformed Chrysler’s image from beaten-down, bailed-out failure to iconic American underdog on the verge of greatness. The campaign has been so successful that Chrysler launched an IFD collector’s line. Enthusiasts can purchase IFD track jackets, baby tees, coffee mugs, and Carhartt gear worked up with the new IFD logo (the Joe Louis fist gripping the Chrysler wings).
The story behind the ads is already the stuff of legend. François recalls feeling the stirrings of an idea while watching commercials for vinyl replacement windows and “one-day only” sales events in a Detroit hotel room on his first trip to the city in 2009. Amidst the dreariness of American television, something clicked: “If we could bring back the city that made us, we could take back our rightful place within it, because Detroit, this very place that the public hates so much, is the source of what will save it.”
In 2009, America did hate Detroit. Detroit signified failure. When the Detroit Three executives took their private jets to Washington in late 2008 to ask the Bush administration for a “bridge loan” similar to the bailouts being given big Wall Street banks, they were met with incredulity and anger. The American public was unmoved by the automakers’ plight, and Congress briskly voted against a loan. But Bush didn’t want GM and Chrysler going under on his watch, so he threw them a bone from the TARP fund that held them over until Obama took office. The Obama administration decided that an unstructured bankruptcy by these two firms (particularly GM) would be a financial and political nightmare, and so resolved to provide a multi-billion-dollar bailout in exchange for a Treasury-led restructuring of the firms. (Ford avoided this fate by withdrawing its request for loans.)
“Team Auto” — Obama’s auto restructuring committee — believed that GM was viable as a stand-alone company, but not Chrysler. Fortuitously, Fiat was looking to expand its presence in the North American market, and so a hasty marriage was arranged, followed by a Treasury-led structured bankruptcy of the two firms in early summer 2009. In the end, twenty-two assembly and parts plants were closed, four divisions were sold or eliminated, and GM and Chrysler were divided between various stakeholders. These included the US and Canadian governments, the UAW’s employee trust fund, and in the case of Chrysler, Fiat.
Fast forward to Superbowl Sunday, 2011. Green Bay versus Pittsburgh. Chrysler had survived the structured bankruptcy and was showing clear signs of improvement. Profits and market share were up, quality was improving, and new models were out. But customers remained wary. Chrysler cars still ranked low in JD Power quality reports, and their “cool factor” left something to be desired. While Ford came through the crisis smelling like roses because it avoided a government bailout, Chrysler and “Government Motors” were tainted by Treasury’s hand-holding. Chrysler dealers gathered at a St. Louis hotel before the game, hoping to get a look at the new $9 million Superbowl ad. David Kelleher, a dealer from Glenn Mills, Pennsylvania, remembers the first time he saw the ad: “I was stunned. I looked around. The room was silent. Some people were crying. Then the applause started and just rolled through the auditorium and kept going. We felt a rebirth.”
The “Born of Fire” ad is sophisticated, powerful — a quantum leap beyond the previous year’s ad, which featured George Washington mowing down a regiment of redcoats in a Dodge Challenger. “Born of Fire” propels us, metaphorically and physically, through Detroit and its crisis, and onto the stage of its redemption. Eminem, Detroit’s prodigal son, drives the new Chrysler 200 while the voice of Michigan native Kevin Yon, set against the swelling tempo of “Lose Yourself,” gruffly commands us to reconsider our preconceptions of Detroit, to view with fresh eyes what the city has to offer. Images of the Joe Louis fist, figure skater Alissa Czisny doing a haircutter spin, a well-dressed black man crossing the street, Diego Rivera’s Detroit Industrial, and Eminem easing up to the Fox Theater and joining the Selected of God gospel choir on stage remind us of Detroit’s iconic status as the Motor City. The equation is simple — Chrysler’s rebirth equals Detroit’s rebirth equals America’s rebirth.
“Chest-pounding,” “defiant,” “redemption,” “comeback” — the critics loved it. But in the midst of IFD’s frothy reception, a few haters did emerge. The Made in the USA Foundation argued that while the Chrysler 200 is made near Detroit, the other cars in the IFD ads, like the 300 and the Town and Country minivan, are made in Ontario. Chrysler’s connection to Detroit’s recovery is also nebulous. Chrysler does have one plant in Detroit — four thousand people build Jeep Grand Cherokees and Dodge Durango SUVs at the Jefferson North Assembly Plant. And it still produces roughly half its cars and trucks in the Midwest. But Chrysler (like GM and Ford) has been restructuring its US production footprint for decades, with Detroit seeing a steady and permanent decline in investment. Chrysler CEO Sergio Marchionne may have felt a little funny about the company’s dwindling footprint in the city, because he recently rented out the top two floors of the Dime Building in downtown Detroit and has taken to calling them Chrysler House.
Despite the comeback spirit of the ad, recovery has been elusive for Detroit. The state took over the city’s school system in 2009, and residents are currently fighting a push by Governor Rick Snyder to take Detroit through a Chapter 9 municipal bankruptcy. In mid March of this year the city was put into state receivership, with the lawyer who structured Chrysler’s bankruptcy appointed as emergency manager with the mandate of saving Detroit from the same fate. If Detroit declares Chapter 9, the state will almost certainly cut services, open (and gut) union contracts, and possibly even rezone the city to make it physically smaller, amputating peripheral areas. As it stands, vast swathes of Detroit are abandoned, thousands of streetlights are permanently out, and many residents say that police and ambulance services simply never come when they call. According to city officials, more than a third of Detroit residents live in poverty, and unemployment estimates range from 14 to 30 percent. The city’s most successful attraction these days is cheap housing for artists and fortune-seekers, alongside a burgeoning “ruin porn” industry for out-of-towners who gawk at the vine-strangled Michigan Central Terminal or snap pictures of the Vanity Ballroom’s “unsalvaged” art-deco chandeliers, lamenting the demise of America’s golden age. When asked during the 2013 Detroit Auto Show about the city’s looming bankruptcy, Marchionne was dismissive, saying, “I don’t see what the consequences would be for us.”
Marchionne is at least honest — Detroit’s bankruptcy would have very little impact on US assemblers. And besides, for all the warm feelings we get watching IFD promos about successful Detroiters, Chrysler tells us that the IFD ad campaign is not really even about Detroit. According to Chrysler spokesman Michael Palese, “‘Imported from Detroit’ is sort of a fanciful reference; it was never intended as a literal reference. It’s more of an image-and-marketing-type program.” Fair enough — all good advertising needs a signifier. In this case, Detroit is a signifier for crisis — America’s crisis.
In Chrysler’s 2012 “Halftime in America” IFD spot, the story of American crisis is explicit. Clint Eastwood walks along a deserted, poorly lit street, amid images of a prairie farmhouse, American flags, and solemn stills of mothers and their children He tells us: “It’s halftime in America too. People are out of work and they’re hurting. They’re all wondering what they’re gonna do to make a comeback, and we’re all scared because this isn’t a game.”
Indeed, the dramatic recovery of the US auto industry following its 2009 restructuring was a bright spot in an otherwise bleak “recovery.” Chrysler was able to pay back its government loans in May 2011, six years ahead of schedule, and Fiat bought out the Treasury’s remaining shares of the company for $500 million. Ford was the most profitable automaker in the world in 2010, and GM posted solid earnings, raking in over $20 billion at its 2010 IPO, the largest in US history.
If we gauge economic recovery by the return of corporate profitability, the Detroit Three are not unique. Profits for both financial and nonfinancial firms have returned to pre-crisis levels, and Bloomberg recently reported that many companies are sitting on piles of cash. But for the rest of the country, the situation is pretty dismal. Official unemployment hovers around 8 percent, but if you count the people who are forced to work part-time, or who have been dropped from the rolls because they’ve been looking for a job for a month or longer, the numbers jump to anywhere from 15 to 23 percent of the population.
The Great Recession also exacerbated underlying trends in the job market that don’t bode well for the resumption of demand in the long-term. During the downturn, 78.7 percent of the jobs lost were either mid-wage or high-wage jobs like paralegals, carpenters, nurses, and accountants. According to the Bureau of Labor Statistics, three out of five newly created jobs are part-time, low-wage jobs with little opportunity for advancement. Many companies looking to maximize profits and efficiency are using sophisticated workflow software to avoid overstaffing, forcing workers to clock two- to four-hour shifts that change day to day and week to week.
In 2010, income inequality jumped to its highest level since the government began tracking it in 1967. Inequality rose even higher in 2011 — median household income dropped to $50,054 with all households in the middle seeing a decline. And while the Dow reached a record high this March, roughly one in ten families, and one in four children, remained dependent on food stamps. The Occupy movement that sprang up in Zuccotti Park in September 2011, and quickly spread around the country and across the world, captured popular anger over the bailout of big banks and companies in the face of increasing debt and poverty for the 99%.
“Halftime in America” also taps into deeper fears that the crisis that swept the country and many parts of the world in 2007 and 2008 is much more serious than a bout of unemployment, a downturn, a few lost jobs. In a 1942 joint piece entitled “An American Proposal,” Fortune, Time, and Life magazines declared that the US was the “strongest single power in the postwar world” and discussed how the country should use this power to shape the world and secure US interests. Some scholars argue that this age of dominance is over, that the crisis signals the exhaustion of the US-led model of neoliberal globalization and possibly even of capitalism itself.
Predicting the future is a risky business though, and at the moment the limits to capital are unknowable. Chrysler assures us that the future need not read like a Philip K. Dick novel. At the end of “Halftime in America,” in a tone reminiscent of Reagan’s 1984 “Morning in America” speech, Clint tells us that we’ve seen hard times before, that we simply need to pull together and stop blaming:
We found a way through tough times and if we can’t find a way then we’ll make one. All that matters now is what’s ahead…. This country can’t be knocked out with one punch. We get right back up again, and when we do the world is going to hear the roar of our engines. Yeah. It’s halftime in America and our second half’s about to begin.
The IFD spin-off ads elucidate how we’ll get through the crisis and start our second half. In “Tommy and the Ram,” a wife leaves a note for her husband:
Tommy, I know you’re busy…. I just wanted to tell you that I know it’s been hard and you never once complained or stayed home feeling sorry for yourself. You just said, “Where there’s a truck, there’s a job.” You were so stubborn, you wouldn’t even let us take help from Dad. And you were right.
Then there’s the Chrysler Town and Country ad, “The Quiet Ones,” in which a hockey player’s dad tells us:
Some are quieter than others. Being the squeaky wheel is just not their style. You’ll find them with their heads down, working their butts off. Occasionally they look up from their work and look behind them … and then put their heads down and begin working again.
In our moment of crisis, the answer is simple, age-old: Work harder. Austerity is good and moral. Keep your head down. Don’t complain. Don’t blame.
Chrysler’s new “So God Made a Farmer” Dodge Ram ad drives home the theme of hard work. Detroit is replaced by the Heartland, and Clint is replaced by Paul Harvey, America’s favorite right-wing radio icon. In the ad we hear Harvey’s deep, staccato voice, giving his 1978 Future Farmers of America address against a montage of stills featuring pitchforks and cowboy hats. The speech overlays the Genesis creation story with imagery of hardworking farmers nursing dying colts, driving to school board meetings, and carving axe handles out of persimmon roots. Francois says of the new ad: “We set out to create a call to action to support farmers and to recognize their place as the foundation of the American character.” Here, American character is defined by a willingness to work hard amidst scarcity, and farmers, we’re told, exemplify this. And perhaps the fact that almost no one is a farmer anymore suggests that we’ve lost this part of our character, that the rest of us have forgotten how to work hard, and that this forgetting, rather than intrinsic contradictions within capitalism, is what got us into a crisis. We need to return to our roots and revive our work ethic.
Paul Harvey had strong feelings about American character. A widely cited New York Times obituary remembers Harvey as a man who loved God, country, rugged individualism, and traditional family values. He loathed “welfare cheats, big government, bureaucrats, permissive parents, and leftist radicals.” In a 1965 broadcast entitled, “If I were the Devil (Warning for a Nation),” Harvey says:
If I were the devil, I would take from those who have and I would give to those who wanted, until I had killed the incentive of the ambitious. And then, my police state would force everybody back to work. Then, I could separate families, putting children in uniform, women in coal mines, and objectors in slave camps. In other words, if I were Satan, I’d just keep on doing what he’s doing.
Considering auto’s “big government” bailout, Harvey and Chrysler make strange bedfellows, but Chrysler’s use of Harvey’s 1978 FFA speech is interesting for other, perhaps unintentional, reasons. The speech was about the character of American farmers, and it was also about crisis. The number of family farms in the US was halved between 1950 and 1978. President Carter, onetime Secretary of the Plains, Georgia FFA chapter, was at the convention too. He summed up the farm crisis for the students: “Farm population has gone down. Mechanisms, chemicals, advanced pesticides of all kinds have become an integral part of life. Family structures are not nearly so sound nor stable.” Carter linked the crisis to broader problems in the country:
Inflation, my biggest domestic challenge of the present and the future months — there is no way to win, because when you try to control inflation, control spending, it’s inevitable that you aggravate very fine special interest groups, perhaps students, perhaps farmers, perhaps the aged, perhaps some who are unemployed, because there has to be a limit to federal spending or a reduction of deficits and a much sounder management of government money than has been the case in the past.
The President was describing a crisis that even those corduroy-clad high schoolers felt. In 1978, the country was unraveling in what Greta Krippner describes as a simultaneous social, fiscal, and legitimation crisis. In the post-WWII period, the US greatly expanded its political, military, and economic commitments both at home and abroad. Competition from a revived Europe and Japan, military defeat in Vietnam, and growing social unrest at home made these commitments increasingly unmanageable. By the late 1970s, skyrocketing inflation in combination with slow growth and rising unemployment led to the first major crisis in the US since the Great Depression.
Automakers were also sucked into the crisis. Imports, labor unrest, and the skyrocketing costs of oil and raw materials created a serious profit squeeze in the 1970s. A month after the FFA convention, Chrysler CEO John Riccardo approached the Carter administration for tax relief, anticipating losses following a delay in releasing new models. But the government was wary of setting such a precedent and Riccardo was rebuffed. Within a year, Chrysler’s situation had deteriorated so severely that bankruptcy was imminent. After intense negotiation, Congress passed the Chrysler Loan Guarantee Act in late 1979, creating a federal board to oversee restructuring of the company in exchange for $1.3 billion in loans.
The similarities between the 1979–82 auto crisis (which started with Chrysler but soon included Ford and GM) and the 2008–2009 auto crisis are quite striking. Both crises were the result of a major nationwide recession. Both crises led to intensive intervention by the US state and resulted in a Treasury-led restructuring of Detroit automakers (forced restructuring for Chrysler in 1980–81 and GM and Chrysler in 2009). And both crises led to a rapid turnaround for the firms. Chrysler returned to profitability in 1982, paid back its loans in 1983, and by 1985 all three US automakers were making record profits. But what is most striking about the two crises is that they were both resolved by pushing the costs of the crisis onto working people, allowing the firms to regain profitability and continue on as they always had.
As part of the 1979 loan agreement, the Treasury forced the UAW to open its contract, give back $462.5 million in wage and benefit gains, and agree to the permanent elimination of more than a third of Chrysler’s hourly workforce. The concessions were an historic blow to autoworkers and signaled to the rest of the country that it was open season on organized labor. GM and Ford quickly secured concessions of their own, and in 1981 Reagan made an already clear anti-union message indelible by breaking the air traffic controllers’ strike. According to Kim Moody, public employees, truckers, steelworkers, meatpackers, and workers in the trucking, airline, rubber, and agricultural-implement industry had all agreed to major concessions by the end of 1982. Organized labor has never recovered. At less than 12 percent, unionization in the US is now at a seventy-year low and average real wages are lower than they were in 1972.
The same thing happened in the 2009 bailout. Amidst a widespread consensus that autoworkers were to blame for the crisis, the Treasury demanded that the UAW and other unions agree to major concessions in exchange for bailing out their bosses. In his memoir Steve Rattner, former private equity manager and head of “Team Auto,” recalls Rahm Emanuel, Obama’s chief of staff, barking “Fuck the UAW!” in response to a Team member’s reminder that tens of thousands of autoworker jobs were at stake in the crisis. According to Rattner, Emanuel’s sentiment left him and his team feeling “newly confident that, at least if Rahm Emanuel had anything to say about it, the President would stand behind [their] tough approach.”
Softened up by two decades on the defensive, the UAW agreed to the Treasury’s watershed demand that GM and Chrysler “make every effort to achieve labor cost parity with the [non-union] transplants,” a demand that essentially negates the right of workers to better their lives through collective bargaining. According to the final agreement, all new-hire wages would be cut in half to around $14.50 an hour, a tiered wage system (second- and third-tier wages, along with flex, temporary, and contract workers) would be normalized, and a six-year wage freeze and strike ban for all Chrysler and GM workers would go into effect immediately.
As David Harvey says, “Capital never solves its crisis tendencies; it merely moves them around.” The auto crisis and the broader financial crisis were resolved (at least temporarily) by pushing their costs onto workers and taxpayers. Capital accumulation and corporate profitability has resumed through taxpayer-funded Wall Street bailouts, reversing decades of hard-won gains by autoworkers, vilifying school teachers and eliminating public-sector union rights, continually denying the contributions of undocumented workers, using bankruptcy to steal jobs and pensions, and forcing part-time workers to exist at the beck and call of workflow software.
And so the fundamental problem with Chrysler’s ad campaign is not its claim that it and Detroit are on the road to recovery together, or that its recovery is the result of some Heartland work ethic that most Americans have forgotten. These are stories designed to make us feel good, to make us believe that working hard will get you somewhere, and that we just need to work harder for things to get back to the way they used to be. But deep down we know that hard work isn’t the secret ingredient. Americans have never stopped working hard. Average productivity has increased roughly 2 percent every year since 1990, even during the crisis, while manufacturing productivity increased over 3 percent each year during the same period.
No, the big lie perpetuated by Chrysler’s stories is that its recovery is America’s recovery, like Charlie Wilson’s persistently misquoted but nonetheless pervasive remark that “What’s good for General Motors is good for America.” This is simply not true anymore. Corporate America might be recovering, but working people aren’t. For corporate America to recover, the rest of us have to take a pay cut or lose our job, our pension, our health insurance, our home, our time with our family. Recovered profits aren’t trickling down to create decent jobs or pay workers back for concessions.
If we’re going to get through this crisis and end up better off on the other side, we need to tell different stories, new stories, stories that don’t glorify docility and subservience, stories that don’t, as C. Wright Mills once said, confuse personal troubles with public issues. What better place to start than Detroit? Not the Detroit of corporate propaganda, but the Detroit that fights, the Detroit of the sit-down strikes and the Battle of the Overpass. We can draw inspiration and learn lessons from Madison, Chicago, Immokalee, and New York, and any place people speak truth to power. These stories define us. These are the stories we should tell.
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