GM Repays its Loans Early, Oops, No it Didn’t!

The title of the article from Brand Channel says its all:  GM Loses  Trust After Payback Claim.

GM executives are being rightly scored – from Capitol Hill to Madison Avenue – for public statements and a new advertising campaign, both featuring CEO Ed Whitacre, that imply the company has repaid its obligation to the U.S. government and to the American people. Or at least that could be inferred as doing so.

The ads on all major TV networks have been noting that the company repaid its original $6.7-billion U.S.-government loan “in full” and “with interest five years ahead of the original schedule,” as Whitacre walks through a GM plant.

One problem with such a hopeful narrative, of course, is that GM simply repaid the loan with another part of its proceeds from the government bailout, robbing Peter to pay Paul, as it were – or maybe robbing Nancy to pay Barack. Whitacre didn’t mention that in the ads.

From a company that has the lost the trust of the American buying public, and now the American taxpayer, in so many ways, this is not how to start rebuilding trust.