OLD Media Moves

The business of politics

October 31, 2012

Posted by Liz Hester

With the economy the central issue in this year’s election, it’s not surprising that many companies have been mentioned by name on the campaign trail and in ads. But none have actually had to set the record straight themselves, until now.

Chrysler, which received government support and money to get through bankruptcy during the financial crisis, had to send an email to employees today after Republican presidential candidate Mitt Romney said it was planning to move Jeep manufacturing jobs to China.

From the New York Times Caucus Blog:

Chrysler’s chief executive on Tuesday strongly refuted claims that production of Jeeps would shift to China, an insistence that cast further doubt on the Romney campaign’s recent efforts to undercut President Obama’s support for the auto industry as it fights for Ohio’s 18 electoral votes.

In an e-mail to employees, the chief executive, Sergio Marchionne, said that Jeep’s commitment to the United States was unequivocal. “I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China,” he wrote. “It is inaccurate to suggest anything different.”

Mr. Marchionne’s response — an unusually forceful gesture from the chief executive of a major American corporation a week before Election Day — came as the politics of the auto bailout took center stage in the presidential campaign.

The Romney campaign has come under considerable criticism in recent days for taking liberties with the facts in a new television commercial that suggests Jeep, a recipient of federal bailout money, will soon outsource American jobs to China. Chrysler, Jeep’s parent company, does not in fact have plans to cut its American work force but is considering opening a facility in China where it would produce Jeeps for sale locally.

The Chrysler head decided to speak out after Romney made remarks at a political event in Ohio. From the Wall Street Journal:

Chrysler, like Detroit rival General Motors Co. has tried to keep its distance from the presidential contest, even as President Barack Obama has used their comebacks from federally financed bankruptcies as a prime selling point in his effort to win votes in the U.S. auto industry heartland of Ohio and Michigan. Chrysler on Monday reported an 80% increase in third-quarter net income.

Mr. Romney’s campaign launched an ad in Ohio last week aimed at blunting the Obama campaign’s effort to take credit for the auto industry recovery. In the ad, an announcer states that Mr. Obama “sold Chrysler to Italians who are going to build Jeeps in China.”  The line is accompanied by images of cars being crushed at a junkyard. The Romney campaign has defended the ad as factual. The Obama campaign on Monday shot back with an ad characterizing the ad and Mr. Romney’s statement as false.

Chrysler hadn’t issued a statement on the issue since a blog post from the company’s chief spokesman, Gualberto Ranieri, which was posted prior to Mr. Romney’s remarks in Ohio. That post dismissed as false the speculation on some blogs that Chrysler was considering sending U.S. Jeep production jobs to China.

In his email to employees, Mr. Marchionne said the company plans to invest $500 million in the Toledo factory that builds the Jeep Liberty model and plans to add 1,100 jobs at the factory by 2013.

What makes this story interesting isn’t the back and forth of politics, but the obvious public relations and brand protection strategy Chrysler was forced to implement. It’s rare for any corporation to weigh in on politics.

After the 2010 Supreme Court ruling that allows unmitigated corporate contributions to candidates, many feared companies would own the election with their deep pockets. But as Bloomberg Businessweek reported in August, many corporations are putting limits on how they back candidates to avoid public relations nightmares.

Chrysler is looking to avoid the label of a company that moves jobs overseas, hence the quick move to respond to political statements. So what is clear from all of this is that companies haven’t forgotten the bottom line and that protecting their images remains of the utmost importance.

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