Timing is everything.
Just ask actor Jeremy Piven.
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His new film “The Goods: Live Hard. Sell Hard,” about the bigger-than-life travails of a sleazy car salesmen is about to hit the theatres just as the frenzy over the government’s Cash for Clunkers program is rising to a crescendo.
Before the film has even opened, the buzz has been palpable.
For the first time in anyone’s memory, the Hollywood spin machine has teamed up with Washington to market a movie. The promotional budget for this low-brow comedy is extreme.
So far $3 billion has been committed. Even by Tinseltown standards, that’s huge.
In this town, everybody who’s anybody is getting paid to play someone else.
Are You the President?
Piven’s over-the-top portrayal of talent agent Ari Gold on HBO’s hit series “Entourage” is modeled after Hollywood legend Ari Emanuel, brother of Presidential Chief-of-Staff Rahm Emanuel. In an odd act of symmetry that only could happen in the weird world of Hollywood, Piven appears to be channeling the President himself.
Put a plaid jacket and day-old beard on the President, and the resemblance to Piven’s on-screen persona is eerily striking. With the hard sell tactics the President has been using lately, it’s been tough to tell where reality ends and fantasy begins.
President Obama, however, is not the only hard-charging elected official donning the plaid jacket. Not to be outdone, Dalton McGinty, the Premier of Canada’s Ontario Province, has been offering $10,000 to any consumer who trades in a clunker for a new plug-in hybrid.
One catch.
The only vehicle that fits “Crazy Dalton’s” rebate criteria is G.M.’s new concept car, the Chevy Volt. Although it is touted to get up to 230 miles per gallon, it won’t be released until approximately July 2010.
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Now that’s advance marketing.
Ostensibly, this provincial governor is only mimicking the President. He’s trying to protect his investment. Ontario, along with the federal government in Ottawa, holds a 12 percent stake in G.M. Canada whose operations are largely based in Dalton’s province.
Look at the Prices
By any measure, the federal government’s Car Allowance Rebate System, or CARS as it officially is known in Washington, has been a rousing success. It’s the rage and has been bringing new car buyers out of the woodwork.
Nationwide, dealers are reporting a huge boost in sales. Ford's sales climbed 2 percent over July 2008, giving the company its first monthly sales increase in 19 months.
With the advent of the CARS program, some vehicles end up costing buyers only half the original sticker price when the maximum government voucher is added to the factory rebates and dealer discounts. A classic example is a 2009 Pontiac G5, a two-door compact coupe similar to the Chevrolet Cobalt.
A G5 with a sticker price of $17,285 at one dealership sold for a final price of $8,200 after the government voucher and other discounts were subtracted.
The new F-150 models are particularly good buys because they qualify for factory rebates of up to $6,000 in addition to the $4,500 government vouchers. That means a buyer can get $10,500 off the sticker of the F-150, which is the nation's best-selling vehicle so far this year, as it has been for most of the past quarter century.
Critics of the Cash for Clunkers program say that in any given month, even during the recession, the industry has been seeing about 60,000 of these gas guzzler trade-ins even without the incentive program. Before the program, no one was paying attention to these deals. The real question is whether these transactions would have happened without the sweetener being supplied by the federal government.
Traditionally, with latest models hitting the showroom floors, August has been the busiest month for new car sales. With pump prices for gasoline on the rise, there is little evidence that the government’s cash incentive program has flushed out buyers who wouldn’t otherwise be in the market. They may have just made their buying decisions a few weeks earlier.
If that’s the case, then it appears that this program is no more than a government give-a-way to well-heeled consumers who were planning to trade in their gas guzzling Lincoln Navigators or Escalades for a Lexus SUV hybrid.
Don’t get me wrong. Reducing our carbon footprint and re-energizing otherwise moribund auto sales is a laudable goal. I am just not convinced that Cash for Clunkers has done anything other than hand a golden cookie to folks who likely didn’t need the help.
Although the logistics may have been nightmarish, the President should have targeted the funds to incentivize lower and middle-income purchasers driving gas guzzlers who otherwise may not be in a financial position or have the credit score to buy a more fuel efficient vehicle.
Either way, the program will boost the box office for Piven’s upcoming bio-pic. Ain’t Hollywood great?
John Cohn is a senior partner in the Globe West Financial Group, based in West Los Angeles. He may be contacted at www.globewestfinancial.com
