Marketplace Report: Lee Iacocca Returns in Ads
ALEX CHADWICK, host:
Back now with DAY TO DAY. I'm Alex Chadwick.
The man who pulled Chrysler out of near bankruptcy in the 1980s is coming back in commercials. The automaker says that former CEO Lee Iacocca, one of the most successful salesmen ever in any business actually, is going to come out of retirement to tout a new sales gimmick. Chrysler's going to join the other two parts of the Big Three to offer employee discounts for cars to absolutely everyone. Joining us from New York is "Marketplace's" Bob Moon.
Bob, why is Chrysler asking Lee Iacocca to get back there in front of the cameras again?
BOB MOON ("Marketplace"): Well, you might say that they're rolling out the big guns. But there's some debate among analysts about whether this is really going to get as much attention as Iacocca got back in the 1980s when, you may recall, he was chairman and CEO of Chrysler and pitching cars on TV and radio with the tag line, `If you can find a better car, buy it.' Well, in announcing this new ad campaign, a Chrysler spokesman said even his 13-year-old daughter had heard of Iacocca. But he's now 80 years old and there's some question within the ad industry whether he's a good spokesman for what one analyst calls the hip, cool and retro-looking models that Chrysler is trying to sell. On the other hand, some other advertising experts are calling the Iacocca ad campaign a brilliant decision by Chrysler.
CHADWICK: You know, maybe the brilliant decision is this marketing campaign, this employee discount idea. GM tried it last month, and the results were just spectacular.
MOON: Yeah, General Motors has really throttled up sales with this approach, if you will. They needed something to move attention away from the low-interest and zero-interest financing that everybody had been offering. And this you-pay-what-we-pay program really gave a sales jump. They were 41 percent up last month, their highest total in almost 19 years. This has really triggered an all-out price war now. GM announced it would be extending this program through August 1st, and Ford and Chrysler immediately announced that they would offer their own employee-style discounts. And Chrysler says it needed to cut through the clutter, so it's offering up to $3,500 cash back. That's on top of offering employee pricing on most 2005 models.
CHADWICK: Yeah. I wonder, is there enough profit in these cars so they can actually make money selling at employee discounts, and could it go to other businesses as well?
MOON: Well, the profit thing--we'll find out. One of our reporters here in New York told me that she went to a CD store this week, a national chain, and she was offered an employee discount. But the Associated Press has looked into this and reports that these kinds of incentives aren't really likely to catch on among retailers. A spokesman for the National Retail Federation told the AP, and I quote, "Retailers are already aggressive when it comes to discounting."
And today in the "Marketplace" newsroom, we're looking into how the fallout from yesterday's terror attacks might affect the stock market for the rest of the year.
CHADWICK: Bob, thank you. Bob Moon of public radio's daily business show "Marketplace." They join us regularly at this time for discussions about money and business. And "Marketplace" is produced by American Public Media.