GM Wastes Taxpayer Money at New York Auto Show

private reception signFrom General Motor’s lavish presence at the New York International Auto Show taking place this week and next, you would think that the company is wildly profitable and that it has already paid back the $50 billion it got from taxpayers. Either that, or GM’s much-ballyhooed cost cutting has failed, and that its bad old habits are very much alive.

NLPC Associate Fellow Mark Modica and I spent Wednesday walking the floor of the show at the massive Jacob Javits Convention Center on New York City’s west side. It is impossible to know how much GM is spending on displaying its vehicles, technologies and related events, but it is more than any other car company. And it is certainly too much.

Transformers photoSome simple metrics quantify GM’s spending binge at the show. First, there’s square footage of display space. GM’s main display space occupies the entire North Hall of the Javits Center, a cavernous space of some 80,000 square feet. In contrast, Honda has about 10,000 square feet in the main hall. Both companies have additional space in a separate area for trucks and vans, which makes the disparity even worse.

Mark and I counted 97 or so GM vehicles, including 7 Chevy Volts. Honda has about 27 vehicles at the show. Other companies, like GM’s domestic competitor Ford, have a bigger presence than Honda, but no company comes anywhere near GM. Vehicle counts only tell part of the story. Whereas Honda’s displays were relatively spartan, GM brought in multimedia displays, lush seating areas, a fake fireplace, and a small army of tall, shapely models. (I am talking about women, not cars.)

Cevy Volt babe photoThe Chevy Volt even has its own babes. These professional models travel around with a mounted chassis of the car that includes the engines and batteries, so you can see what’s inside. A pretty blonde told us it was her fifteenth show. On top of her good looks, she could answer just about any question about the Volt. The hallway where she showed off the Volt (not included in the 80,000 square feet) was guarded by a yellow Camaro, with the giant Transformer from the movie hovering above it.

carving block photoAs we departed the GM area in late afternoon, workers were busy preparing for the evening’s “private reception.” Bottles of booze were being arranged on tables as carving blocks were being set up throughout the vast space. Too bad we weren’t invited. The crew from “Cake Boss” on the TLC cable network was preparing some special cakes for the event, but they hadn’t arrived yet. Just think of all the variations for cakes in shapes and colors of GM cars!

booze bottles photoWe did get lunch courtesy of GM as the company rolled out the “new Malibu” for 2013. It’s more attractive than the old Malibu. It also looks a lot like a Camry, but that did not stop GM from giving it rock star treatment. A GM exec claimed it “has some Camaro in its DNA.”

Honda display photoOf course, car shows are supposed to be fun, and the hype is a big part of it. GM has every right to promote its products and attempt to create a media buzz around its cars. But will its promotional efforts be multiple times more effective than other companies because it is spending multiple times more money? Nope. Honda is letting it products do the talking, and no one has ever fretted about whether the company will survive.

General Motors is wasting money like it is the government. At the show, it looks less like a company on the rebound and more like Government Motors.


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