Business as ......usual? For GM

[PQ]

I for one don't have a problem with it.

CHANDLER, Ariz. — Just weeks before a deadline that could send it into bankruptcy, General Motors is entertaining 500 of its biggest customers at a luxury spa and golf course in Arizona.
GM, (GM) which has borrowed $15.4 billion from the U.S. government in the past six months, shipped in 150 cars and trucks to the event this week at the Sheraton Wild Horse Pass Resort & Spa, and paid for airfare and hotel lodging for 90% of the guests.
The affair is scaled back from previous years, says GM spokesman Terry Rhadigan. Guests have to pay for their own golf outings, he says, and most of the days are packed with informational sessions on GM's 2010 product line. The guests are GM's fleet and corporate customers, which accounted for 27.6% of GM's business in 2008. Fleet customers can buy dozens of vehicles at a time.

EVENT COSTS DIP: Critics say it looks bad; GM says it promotes purchases

"Our approach this year has been noticeably austere," he says. "We obviously had the option to cancel the event or move it ... but ... do we want to just let our competitors move in and take this important business from us?" Business with fleet customers is "highly profitable," he says. They often order next year's models in June.
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GM is operating on a taxpayer-funded lifeline, having taken $15.4 billion in government loans. It has said it needs up to $30 billion. It faces a June 1 deadline to slash debt and sign new contracts with its labor union, or the government has said it won't provide any more money.
A small number of the customers attending the event were government employees who paid their own way, Rhadigan says.
Helio Fred Garcia, a professor of crisis communications at New York University, says GM's fleet meeting isn't the same as events by other companies that have been criticized for sponsoring lavish entertainment while taking taxpayers' dollars.
"If GM is going to survive ... it has to maintain sales in a competitive marketplace," Garcia says.
President Obama has called for "shared sacrifice" among all of GM's stakeholders.
"I would hope that GM management would spend our financial dollars wisely, and in a manner that would be certainly appropriate in the taxpayer's minds," says Jack Dickinson, president of GM retiree group OverTheHillCarPeople.com. White-collar retirees lost health care benefits at the start of 2009. "I would hope that our management has the foresight to stay away from things that would project a negative image with the public."
GM, Chrysler and Ford executives were harshly criticized last fall for flying on private jets to Washington to ask for government aid. Leslie Paige of Citizens Against Government Waste says it's clear GM didn't learn from that.
"GM has a tin ear to these things," she says. "There shouldn't be any wining and dining right now. They took taxpayer money. If you're going to do that, you need to make some very public displays that you get that the taxpayers are part owners of the company now."
Tom Donaldson, a professor at the Wharton School at the University of Pennsylvania, says GM and other companies accepting government aid should be working hard to stay under the radar.
"Even legitimate functions that help sales, that create partnerships, that are not over the top and luxury, they are almost out of bounds from the public standpoint," Donaldson says.
GM says the Treasury wasn't consulted on the event, nor would it ask for permission. The Treasury has said it doesn't want to interfere with GM's day-to-day operations.
Jarman reports for The Arizona Republic. He reported from Chandler; Carty, from Detroit

http://www.usatoday.com/money/autos/...fleet-gm_N.htm

[The_Blur]

This is a quarter of GM business. If GM didn't hold this event, there goes a ton of sales. Try to make sound terrible if you like, but this is sales, and salespeople have to do their jobs even when hell freezes over.

[manimsoblack]

I seriously hated it when people are like "they took taxpayer money" blah blah blah.... as if they don't pay taxes too...

[MrIcky]

It's a NECESSARY BUSINESS EXPENSE.

"Critics" are always saying something looks bad, but they just sit around writing crap- they don't actually have to DO anything. If they had to DO something instead of going to an Ivy League School then criticizing everything from the walls of a think tank, they'd realize that you have to throw a few ducats down for dinner for a VIP if you want the VIP to drop a million dollars on you. Even Mom and Pop's realize you need to take a good client golfing now and then.

[CamaroHutch]

Hmmm, wine and dine... gotta spend money to make money, everyone knows that! No problem here at all! 1/4 of all sales, common, gotta take care of your customers!

[Steve]

It's all part of doing business. Like it has already been stated, this core group of customers represents over 1/4 of their sales. You got to treat them right.

[PQ]

Right there with you guys. I guess it's a good move to scale it down a little but I wouldn't have a problem if they didn't. 27% of sales is alot.