This week GM and other automakers were on the hill lobbying Congress to give them $25B in loan guarantees to help build fuel-efficient cars [1]. Lately, U.S. automakers have really needed these guarantees. Their undesirable and inefficient products have lead to poor sales and poor credit ratings, and banks now only agree to give them loans at high rates, or not at all. These guarantees would help automakers get loans at better rates, since the government would be backing them and promising to pay the lender if the automakers are unable[2].

These guarantees come at an expense, though. Congress has estimated that this program will cost $7.5B – that money coming, of course, out of taxpayer pockets [2].

Does GM deserve this taxpayer money? Given the poor decisions GM management has made over the past several years and the many ways the company is misleading the public, it’s easy to argue that it doesn’t.

GM has spent the better part of the last two decades pouring billions into ads for behemoth gas-guzzlers. Increasing global concern over climate change and a tightening global oil supply hasn’t deterred the company from encouraging consumers to buy huge SUVs. As recently as this past Super Bowl, GM spent over $5M for a 60-second ad showing off the company’s large GMC Yukon Hybrid [3]. The ad provided GM a chance to promote its profitable gas-guzzler, while also earning green cred because of the vehicle’s hybrid system (though the vehicle only gets 20mpg). Maybe if GM had spent a little more money actually making efficient vehicles, and less money on SUV and greenwash ads, taxpayers wouldn’t need to bail the company out.

Last year alone, GM spent over $3 billion dollars on marketing. A good chunk of that went to Chevy and its “gas-friendly to gas-free” campaign ($726M), while another large chunk was spent on GMC truck ads ($263M), and another on Hummer ads ($84M).

It would be really great if GM did some day actually build the Volt and other “gas-friendly” vehicles it so aggressively advertises. But, until then, maybe GM should stop spending millions bragging about efficient cars, and instead spend that money building them.

[1] E&E Publishing, September 8, 2008. (subscription required)
[2] E&E Publishing, September 18, 2008 (subscription required)
[3] The Detroit News. January 31, 2008. “Big 3 tread lightly on Super ad field; Automakers cut back on big-ticket roles.” Eric Morath