Not Willing to Vote Away a Good Deal
Recently, NBC News/The Wall Street Journal released a poll on the heels of the Massachusetts special election with an entire section focused on voter discontent. Some of the survey’s major findings were that 70% believed the federal government is not working well or is unhealthy, 93% believe there is too much partisan fighting in Washington and 58% feel the federal government has gone too far and tried to do too much.
The effects of voter anger are well know and documented. Between the surge of support for Obama in 2008 to the present day Republican advantage in the generic congressional ballot, voter anger is both fickle and powerful. However, does this anger extend to the private sector and do companies take a hit for taking bailout funds not just in public perception but dollars and cents?
One of the best examples to examine anger in the private sector is the auto industry. The big three faced a very public “trial” in their quest for federal bailout dollars including a magnitude of press stories and multiple trips to Congress. This also lets us examine a striking comparison. Both GM and Chrysler ended up accepting the government’s assistance, while Ford decided to forge ahead without bailout dollars.
In November, Rasmussen tested the favorability of the big three. Their survey found a net favorability of -34 for Chrysler, -22 for GM, but a startling +44 for Ford. Looking at these results its easy to see that Chrysler’s and GM’s bankruptcy had a negative impact on their public perception. Another telling piece of data comes from a recent TargetPoint survey. In December, TPC conducted a survey of voters in Michigan, the auto capital of America, and included Ford and GM in the favorability battery of questions. In our results Ford received a net favorability of +76 while GM was only a +5. Such a stark contrast is important to note in a state like Michigan, where the auto industry has been their life blood for decades.
While there is a documented backlash in public perception for companies declaring bankruptcy or accepting federal dollars, does this correlate to a hit on their balance sheets? Instead of looking at corporate filings, which often requires an advanced business degree to wade through their complexity, its more worthwhile to examine actual auto sales and survey research. In 2009, Ford’s change in auto sales from 2008 was -15.3%, while GM’s and Chryslers were -35.9% and -29.7% respectively. This data would suggest that public backlash is a negative driver in the private sector, however survey data paints are more muddled picture. Rasmussen has been one of the few firms to consistently survey on auto industry attitudes. In September they found that when asked about their next car purchase, more Americans said they would definitely buy from GM, edging out both Toyota and Ford. A graphical display of their data is below. Ford clearly beats GM when the next category of “would consider” is added to the mix, but GM still manages to be in a strong position among consumers.
All in all, it seems that Americans are not willing to “vote” away a good deal or a brand in the same fashion that anger at politicians brings sweeping change. I’d like to hear your thoughts, have you looked at/bought a different car or banked at another institution because of the government bailout? Leave a note in the comment section below.
- Trevor McGaughey
Comments on this entry
I own a relatively new Honda, but if I needed to buy a new car tomorrow, I would not even consider an American car. Not because of their prices, but because of my negative perception of their brand.
As the blog points out though, brand really doesn't matter to most people. What matters is the price or deal. The American public, as seen in both surveys, views Ford more favorably than GM or Chrysler. Yet, the numbers also suggest that people still aren't buying American cars. What’s more shocking than public perception and/or whether or not American companies are selling cars is that people would actually consider purchasing an American car in the future. I find this fascinating based on all of the issues they have had. Maybe the next question should ask why anyone would even consider buying an American car based on all of these past perception and financial problems. Could there be a sense of guilt amongst Americans that they have potentially been hurting the economy by not buying American cars? Maybe they feel the need to consider an American car because, if they don’t, they might hurt the American economy even more. Either way, the question of whether or not Americans consider throwing out companies just like they do to politicians based on voter anger or some other feeling is very valid. Thanks for the insight.